Shumlin Won't Raise Taxes To Fund Medicaid, Resists Reducing Benefits

Dec 29, 2015

Gov. Peter Shumlin says he won't ask the Legislature to raise taxes to pay for an expansion of the Medicaid program.

Shumlin says he tried that approach last session and lawmakers rejected it. According to Shumlin, much of the new money that will be needed to balance the Medicaid budget will have to be taken from other agencies of state government.

The Shumlin administration has a Medicaid funding problem this year largely because the number of people signing up for the program exceeded projections. The shortfall in the current fiscal year is roughly $30 million and is projected to be over $50 million in next year's budget.

Shumlin says the current situation is not sustainable and is frustrated that lawmakers have rejected efforts to dedicate a revenue source to pay for Medicaid.

Instead, he says they're asking health care providers to accept unreasonably low reimbursement rates to help keep the program afloat.

“You can't just keep signing folks up, saying we want to expand coverage, be the lowest uninsured state in the country - which is a great thing - and then say and we're not going to pay for it and therefore providers, it's going to have to come out of your pocket," Shumlin says.

“I don't know which governor is going to get to solve this problem,” he added. “But I hope a governor gets to solve it soon." 

"We are in denial as a state if we don't accept that as we've expanded Medicaid and taken care of the uninsured and refused to pay for it, every other agency of state government has been robbed to pay for that service." — Gov. Peter Shumlin

In the short term, Shumlin says he will balance the Medicaid budget using the same approach that he and other governors have used for years and that's to squeeze the budgets of other state agencies.

"We are in denial as a state if we don't accept that as we've expanded Medicaid and taken care of the uninsured and refused to pay for it, every other agency of state government has been robbed to pay for that service,” he said.

House Minority leader Don Turner wants lawmakers to thoroughly review the Medicaid program with an eye towards reducing what he calls "a very generous benefit package."

"We've expanded it beyond the capability of Vermonters to pay for it by bringing all these new users into the program,” Turner said. “Now we can't afford to do what we were doing."

But Shumlin says he will resist efforts to reduce benefits.

“I don't think that solves the problem,” Shumlin said. “When you reduce benefits you just drive the costs to somebody else."

The administration is expected to review the eligibility standards for Medicaid to make certain that everyone enrolled in the program qualifies under the new expanded guidelines.