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Budget chairman concerned about Medicaid costs

Ben Neary, Associated Press

CHEYENNE, Wyo. (AP) -- A top Wyoming lawmaker says he believes the state should opt out of expanding its Medicaid program, a key component of the federal Affordable Care Act.

Sen. Phil Nicholas, R-Laramie, is co-chairman the Legislature's Joint Appropriations Committee. Speaking at Thursday's committee meeting in Cheyenne, he said he believes that Wyoming is likely to get stuck ultimately with the extra costs if it buys federal promises to pay most of the tab for expanding the low-income health program.

"I think in a general sense, Wyoming does not want to be pushed into an expansion of its Medicaid program," Nicholas said.

Tom Forslund, director of the Wyoming Department of Health, briefed the committee on proposals for how to cut the state's Medicaid bills. He said the Medicaid program served over 77,000 people in Wyoming last year at a cost of over $500 million split between the state and federal governments.

Gov. Matt Mead told reporters this week he will decide by next month whether to recommend lawmakers accept the federal Medicaid expansion offer, which he has said could increase the state's Medicaid enrollment by 30,000 people.

Mead also has said he doubts the federal government could honor its promises to cover most of the increased costs given the shaky condition of the federal budget.

Forslund said his department needs legislative direction on how to proceed on Medicaid. He presented three options for trying to cut costs of the program, ranging from modest tweaks through to what he said would be a transformational change: turning management of the program over to private industry.

Wyoming is the only state that doesn't employ private industry, or "managed care," to keep at least some aspects of its Medicaid expenses down, Forslund said.

Forslund said his agency hasn't yet calculated how much savings the state could expect from the proposed Medicaid cutbacks. He said he expects to present that information to another legislative committee next month.

Responding to a legislative directive early this year to cut spending at the Health Department, Forslund presented lawmakers Thursday with a list of $19 million in cuts for the fiscal year that starts next July and runs through June 2014. The largest cuts are $7.2 million from Medicaid and $4.7 million from mental health and substance abuse programs.

Forslund's total proposed cuts amounted to $132 million, including the cuts for the coming fiscal year, the agency's 2015-16 biennial budget and resulting lost federal Medicaid matching dollars.

Mead has directed all state agencies to prepare for 8-percent budget cuts in the face of stagnant state revenues. The state's financial picture is further clouded by recent congressional action cutting more than $700 million in federal abandoned mine lands funds from the state.

Alan Edwards, administrator of Abandoned Mine Lands for the state, told lawmakers that Wyoming is supposed to continue to collect $15 million a year from the federal program, which imposes a tax on the production of coal. The program has raised $2.9 billion from coal production in Wyoming, the nation's leading coal-producing state, he said.

Mead and state lawmakers have expressed their dissatisfaction with the congressional action stripping the AML money from the state. While the state's congressional delegation has said it intends to try to restore the funding, Nicholas said the state will craft its budgets going forward on the assumption that it won't see the funds restored.