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March 06, 2009

 

County to save $3.5 million in Medicaid costs

Federal government will pick up larger share of Medicaid expenses over next 3 years

By CATHERINE WILDE
Staff Reporter
cwilde@cortlandstandard.net

Cortland County will pay a smaller percentage of Medicaid costs over the next three years as a result of the federal stimulus package, County Administrator Scott Schrader said Thursday.
The federal government is paying a larger share of Medicaid costs, and the county will save $679,000 in 2008-09, $1.8 million in 2009-10 and $1 million in 2010-11, Schrader said.
The change is tied to a state’s unemployment rate, and states such as New York with a high rate will receive 8.8 percent more in Medicaid reimbursements this year above the 50 percent the federal government now pays.
The remaining portion is split between the county and state.
Schrader said the new percentage formula will become effective in April and be retroactive back to Oct. 1, since that is the beginning of the federal fiscal year. Weekly payments will start being reduced April 1 but lump sum estimated payments should start being received in the next week or two, he said.
The majority of the money will go toward offsetting costs that will be incurred by increased demand for social services programs, Schrader said.
“We are seeing increases in caseloads for temporary assistance, emergency assistance and the safety net program,” Schrader said.
“This is not something we can go out and spend as found money, this is something we need to plan on using to combat the increased costs that we’re going to see from increased claims,” Schrader said.
Depending on how much claims costs increase, Schrader said that money in future years could be put toward offsetting the tax burden. A tax break for 2009 will not come mid-year, Schrader said.
“Had the stimulus money come prior to the budget being adopted we could have used the federal government (money) to offset the tax increase,” Schrader said.
Schrader said it is impossible to determine the future years’ tax impact because any offset will depend on social service caseloads. He said there is a projected $200,000 increase in family assistance caseloads from end of year 2008 to end of year 2009. The county’s anticipated costs for juvenile and foster housing in this time is $100,000 more and the Medicaid costs are anticipated to be $300,000 more.
Brian Moore, who oversees the temporary assistance and employment programs in the Social Services Department, said the department noticed a marked increase in temporary assistance, Medicaid and food stamp caseloads in the past six months.
The number of temporary assistance caseloads that are open for temporary assistance, which is a cash assistance program to low income families, is 433 as of March 1, 2009. This is compared to 400 at the same time in 2008. Medicaid cases are at 4,946 as of March 1 this year as compared to 4,601 at the same time last year, and food stamp cases are at 2,658 as of March 1 this year as compared to 2,216 at the same time last year.
Schrader said the new Medicaid payments are based on tiers of unemployment levels in the state. New York already qualifies for the first tier, which assigns 8.78 percent, meaning the federal share is 58.78 percent of Medicaid costs. This will be paid retroactively to October. Schrader said by April of 2009 it is estimated the state will qualify for the next tier because of projected unemployment levels, the federal share of 60.2 percent, and by July of 2009 it is estimated the state will get 61.6 percent of program costs from the federal government.
Schrader said $9.3 million was budgeted for Medicaid costs for 2009. He estimates that, given these savings, about $7.3 million of that will be spent, leaving about $2 million for the county’s fund balance in the end of 2009 for use in future years.

 

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