Kentucky Medicaid officials cite cost uncertainty from federal changes

FRANKFORT, Ky. (WKYT) - Kentucky Medicaid leaders say it is getting more expensive to run the program, including a small piece of the overall budget: administrative costs.

Officials from the Department for Medicaid Services told lawmakers that administrative spending covers staff, major IT systems and basic operations. It accounts for only about one-and-a-half to two percent of total Medicaid dollars.

With federal changes on the way under House Resolution One, Medicaid officials say they are not sure how that will affect their finances.

“The more changes we get the more uncertainties, the more it’s going to cost us, because when we change direction, we get charged for those man hours to do those systematic changes,” said Steve Betchel, the department’s s CFO.

“What the total cost is going to be, I think, is still unknown to the state,” said Veronica Judy-Cecil, the department’s senior deputy commissioner.

Officials say they put aside about $35 million for the new regulations, including system changes for work and community-engagement rules for more frequent renewals.

Officials are trying to keep costs as low as possible.