Sid Salter Column

Published 12:00 am Friday, February 20, 2009

Salter: State Medicaid legislation tied to Obama stimulus package

Mississippi’s Medicaid program funding has for the last several years been dependent on one form or another of one-time, non-recurring funds to pay for the recurring expense of providing public health care.

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With the adoption of President Obama’s $787 billion federal stimulus plan, it appears that the state’s Medicaid program will once again directly or indirectly  be bailed out with one-time funds.

While that’s a relief of sorts to state officials in the midst of a fiscal crisis unmatched since the Great Depression, it doesn’t bode well for a state that hasn’t adequately funded the public health care program it authorized in years.

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.

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

The Legislature and Gov. Haley Barbour have been battling over Medicaid funding for much of Barbour’s term in office — beginning in earnest in 2005

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 (the formal name of the fund that was supposed to manage the state’s settlement with Big Tobacco).

In 2006-07, lawmakers used part of the federal funds provided for relief from Hurricane Katrina to meet Medicaid expenses. And they used deficit appropriations — spending current-year money for the prior year’s expenses.

After failing to fully fund Medicaid in 2008 for the fourth consecutive year, lawmakers were  again the beneficiaries of one-time, non-recurring funds to bail out Medicaid deficits until June 2009.

Last September, Barbour announced that the federal government would refund five years of overpayments —  specifically that the Division of Medicaid under former Gov. Ronnie Musgrove over calculated how many Mississippians received dual Medicaid and Medicare benefits, resulting in the state paying out more to the federal government than was due for five years.

The federal government reimbursed Mississippi $92 million. Barbour said that reimbursement, along with calculating the right number of “dual eligibles,” balanced the Medicaid budget and eliminated the budget shortfall.

That left the 2009 Legislature confronting the same lack of stable funding that previous legislatures have ignored. Barbour blinked by backing off his opposition to higher cigarette taxes.

The House blinked by finally agreeing to half the so-called “hospital tax” that Barbour’s been seeking for the last three sessions. The House last week passed a Medicaid bill that provides $45 million in assessments  from the hospitals to plug the deficit.

What isn’t clear is what restrictions will be on the state in terms of using federal stimulus funds to bail out Medicaid. Republicans have suggested that the legislation  will prevent states from using stimulus package revenue to plug any existing financial holes like the longstanding $90 million Medicaid deficit.

But most lawmakers believe that at the very least, the stimulus plan will offset other state expenses to the extent that Mississippi can bail out the Medicaid program for one or perhaps two years.

For the taxpayers, it’s like drinking from a fire hose.

It’s taken a catastrophic hurricane, historic tobacco litigation and a nearly catastrophic world economic collapse to put the stars in alignment to fund Medicaid in the state over the last five years.

While the stimulus package is welcome relief to lawmakers, it’s not stable funding for a recurring public health care expense.

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