Virginia health officials told key state legislators today that federal changes in the nation's Medicaid program approved this year could cost the state $60 million over the next three years.
"It's an astronomical reduction," said Bruce U. Kozlowski, assistant health commissioner in charge of the state's $500 million-a-year Medicaid program.
Kozlowski urged members of the influential House of Delegates Appropriations Committee to consider replacing the lost federal funds rather than imposing cuts on the program.
"I come to you on bended knee," Kozlowski said. The cuts, which on a percentage basis appear small -- averaging about 3.3 percent -- follow by just three years a major overhaul of Medicaid in which the state adjusted programs and services to make up for a $200 million revenue loss.
"Some things just never go away," said appropriations chairman Richard M. Bagley, who urged the health officials to double-check the estimates, which are based on federal per capita income in Virginia and the nation. Bagley later suggested the committee would support more funds if needed for the program rather than enforce cuts in services to Medicaid recipients.
Kozlowski said the cuts, ironically, resulted from Virginia's economy being strong compared to the rest of the nation's during the recent recession. There are "only four states with a higher per capita income," according to federal officials, Kozlowski said.
Kozlowski said officials had been warned that a cut of as much as 2 percent might be passed on to the state. In previous years the federal share dipped no more than .5 percent.
The 3.3 percent cut discussed today "is absolutely overwhelming," he said.
Virginia currently pays 43.5 cents out of every Medicaid dollar it spends, with the federal government picking up the remaining 56.5 cents.
Under the changes, imposed by the Deficit Reduction Act of 1984 that Congress passed this year, the federal government's share will drop to 53.1 cents per dollar beginning next October.
The state said that would mean reductions of $16 million for the 1985-86 fiscal year and about $44 million during the following two fiscal years.
Dr. William L. Lukhard, commissioner of social services, also told the committee that the deficit reduction act would affect Virginia's Aid to Dependent Children welfare program. However, he said the department expects a lower caseload to reduce expenditures by about $5 million, which would more than cover an expected $4.5 million increase in the program's cost.