Shortfall headache looming

“The (legislative) session begins right in the middle of the budget year,” said Robin Reedy, Gov. Jim Gibbons’ chief of staff. “They might have to address the issue right at the beginning of the session.”

But Reedy held out hope Monday that the Senate will pass a funding bill that was rejected last week.

Under the bill, which fell three votes short of passing, federally paid unemployment benefits to laid-off workers across the country would have been extended. The bill also contained provisions to increase the share of funds that the federal government gives Nevada for Medicaid, the free health care program for the poor, disabled and elderly who do not qualify for other health care benefits.

Nevada had counted on receiving the $130 million in additional Medicaid funds. Legislators and Gibbons included the federal funds in the state budget they approved during a special legislative session in February.

Nevada Medicaid spending in the fiscal year that starts July 1 was set at $1.43 billion by the Legislature, of which $508 million is state funds. About 260,000 state residents were Medicaid recipients in May, up 50,000 from the past year.

With federal unemployment benefits expiring, more Nevadans are expected to seek Medicaid and other aid in coming months.

Because the Legislature meets in February, Reedy said Gibbons does not see a need to call another special session. The state’s fiscal year runs from July 1 to June 30. By delaying some payments and making some budget cuts, Reedy expressed hope that funds will last long enough to leave the decisions to legislators and the new governor.

Gibbons was defeated in the June 8 primary and will not be in office in February.

“The people who will be here (in 2011) will need some damn good numbers people,” added Reedy, who said the Medicaid funding problem has occupied much of the administration’s time for three weeks.

Ben Kieckhefer, a spokesman for the state Department of Health and Human Services, said his agency had not yet been asked by the Gibbons administration to make cuts.

Gibbons in January suggested Nevada opt out of the Medicaid program because of its rising costs. His suggestion was not taken seriously by legislators during the special session.

The governor expressed concern about rising Medicaid costs because, under the new federal health care law, Nevada must spend $613 million more of its own funds during 2014-19 to provide additional Medicaid care for residents.

At his request, Nevada joined in a multiple-state lawsuit challenging the constitutionality of the health care law.

Contact reporter Ed Vogel at evogel@reviewjournal.com or 775-687-3901.