Landrigan: New estimate causes Medicaid costs to shoot up in next budget
CONCORD - State Senate budget writers got more bad news as they craft a two-year spending plan - base costs for Medicaid managed care health insurance just got more expensive.
After about a week of agency presentations, the Senate Finance Committee began getting into the weeds Monday of the Department of Health and Human Services, the state's largest agency that consumes nearly half of an $11 billion plus budget.
HHS officials reported that recent estimates for the cost of traditional Medicaid insurance has gone up $12 per month.
For more than a year, the state has had these lower income health insurance clients receiving insurance from managed care companies.
HHS CEO Sheri Rockburn said that nearly all of the increase is because of an increased number of those on Medicaid with substance abuse problems.
With 138,000 clients on Medicaid, the $12 increase translates to at least $9.1 million.
"I think of this $9.1 (million) unfortunately as our best case scenario. What I mean by the best case scenario is that if our caseloads could drop 2 percent and we can get our per member per month down by 2 percent we would be short $9 million in the House coming into the Senate phase of the budget,'' Rockburn said.
Thus, the cost overrun is much greater if the caseload does not drop by 2 percent over the next year.
The worst case cost increase would be $15 million a year in state costs or $30 million more for the next two-year cycle that begins July 1.
Senate budget writers have about a month to complete work on their proposal. Then a team of House and Senate negotiators would be named to craft a compromise in June.