Sid Salter Column

Published 12:00 am Tuesday, January 6, 2009


Salter: For Mississippi, funding for Medicaid is the Never Ending Story

Forget the movies and books based on the German fantasy novel Die unendliche Geschichte (The Neverending Story) by Michael Ende about a parallel world under siege.

When the Mississippi Legislature is in session, the real Never Ending Story is the state’s Medicaid budget and how to pay for it. Medicaid is the federal-state public health care program for the aged, the blind, the disabled and members of low-income families with dependent children. Almost 40 percent of Mississippi’s Medicaid recipients are children, 25 percent are elderly and about 22 percent are disabled.

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Every $1 expended by the state on Medicaid draws down $3 in federal funds to pay for public health care.

Smoke and mirrors?

Gov. Haley Barbour and the Legislature have been battling over Medicaid funding since before he took office five years ago.

Last summer, after a fourth consecutive year in which the Mississippi Legislature authorized a larger, more expensive Medicaid program than lawmakers appropriated funds to finance, Barbour announced that the federal government would reimburse the state $92 million in overpayments.

Barbour and federal officials said that the Division of Medicaid under former Gov. Ronnie Musgrove over-calculated how many Mississippians received both Medicaid and Medicare benefits as “dual eligibles” and that the mistake resulted in the state paying out more to the federal government than was due for five years.

The $92 million one-time reimbursement infusion postponed a looming political standoff over Barbour’s proposed “hospital tax” or provider fees to pay the state’s portion of Medicaid.

Barbour continues to push for long-term funding of Medicaid with provider fees or “hospital taxes” as he has since 2006. Legislative opponents of those provider fees – or at least opponents of $90 million in provider fees – will continue to push for funding Medicaid with the proceeds of higher cigarette taxes than Barbour wants.

Katrina funds going

While Barbour has agreed in principle to a cigarette tax hike in 2009, he’s pushing a lower hike in cigarette taxes than are a number of key House members. But the Legislature has a long track record of cobbling together funding for Medicaid with one-time money.

In 2005, lawmakers began meeting the state’s growing Medicaid deficits with one-time money. They used money from the supposedly “inviolate” Health Care Trust Fund.

And despite the incessant political pounding on Barbour by some House Democrats for his former career as a Washington lobbyist, those same legislators fell over themselves to use substantial portions of the federal funds provided for relief from Hurricane Katrina to meet Medicaid expenses – funds Barbour led the lobbying effort to gain on Capitol Hill.

Lawmakers under pressure from local hospitals over the “hospital tax” also used deficit appropriations to fund Medicaid — spending this year’s money for last year’s expenses.

In 2009, the Legislature must return to funding Medicaid for FY 2010 without Katrina money – because it’s soon to be all gone. Like Katrina literally was, Medicaid is from a policy standpoint the “perfect storm.”

The state needs both higher cigarette taxes AND a continued “hospital tax” to fund Medicaid moving forward after the federal Katrina relief funds are a memory.

(Contact Sid Salter at (601) 961-7084 or e-mail Visit his blog at