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With enrollment down, Medicaid spending is up in the Commonwealth

Kentucky Department for Medicaid Services

During the latest meeting of the Kentucky Interim Joint Committee on Appropriations and Revenue officials from Medicaid Services reported an increase in expenditures. Representatives from the department told the committee there was an increase of around $1.9 billion in 2024. Medicaid Services Chief Financial Officer Steve Bechtel said this year the department spent 9.8% more than fiscal year ‘23, despite a decrease in enrollment of around 274,000 people.

“Majority of those are in the expansion population. Those are the ones who dropped out. And those that have left the program, or are no longer in the program, those individuals, were very low utilizers. So, you have the same amount of cost spread over a smaller amount of people,” said Bechtel

He also noted the extra spending is likely due to expansionary programs that are being utilized throughout the state.

“We've seen an increase in behavioral health spending. We've seen an increase in the pharmacy spending that I mentioned because we're trying to maximize the drug rebates. Those expenses are in the managed care arena, where they're paying the cost, but I'm having to pay a capitation rate to fund that increased cost. So, a lot of it is in the weeds. I can just tell you it's an actuarial exercise,” Bechtel said.

Bechtel said much of the cost is upfront and returned through various federal programs. Other expansionary programs noted were placed-youth programs, reentry programs for recently incarcerated people, as well as funding for people in active substance abuse recovery. More information about the expenditures and programs available can be found at chfs.ky.gov.