JACKSON - Gov. Haley Barbour says lawmakers should solve Medicaid's deficit problem this week and he supports using the state's tobacco trust fund to cover the $268 million shortfall.
"There's one thing that's urgent now. We need to get this covered this week," Barbour said Tuesday during an interview in his office. "There's only one source which to fund it. That's the health care trust fund."
Medicaid Executive Director Dr. Warren Jones said the program borrowed $50 million to pay claims through March 11. Medicaid had been scheduled to run out of money at the end of February.
The House and Senate have both passed deficit appropriation bills for Medicaid. The Senate wants to take $200 million from the tobacco trust fund. The trust fund was established in the late 1990s with Mississippi's settlement from a massive lawsuit against tobacco companies. It has a balance of about $500 million.
The House wants to use state revenue and money from the rainy day fund.
Neither plan would totally wipe out the deficit.
House and Senate negotiators met on Tuesday evening.
Negotiations for a compromise have stalled as each side appears unwilling to consider the other's proposal.
State officials have known about Medicaid's deficit since at least December.
State law requires Barbour to make cuts to an agency when its spending is 12 percent over budget. But Barbour said Tuesday that he could not have made enough cuts to Medicaid to bring it into compliance with state law because of the size of the deficit.
"If we eliminate every single optional service provided by Medicaid, we would not be able to get it in compliance with the law," Barbour said.
Barbour said aside from the trust fund, the only other option would be to increase the state sales tax from 7 percent to 11 percent, a move he described as "preposterous."
House Speaker Billy McCoy, D-Rienzi, on Tuesday said the trust fund isn't the only option.
"There are other ways to deal with it than that," McCoy said.
The House has passed a cost-saving proposal for Medicaid that includes a 50-cent-per-pack increase in the cigarette tax, which is currently 18 cents.
The Senate's cost-saving plan would remove Personnel Board protection from employees in most state agencies - a change Barbour wants.
Both plans reduce some Medicaid services, including prescriptions, emergency room visits and overnight hospital stays.
Lt. Gov. Amy Tuck, who presides over the Senate, has not yet appointed Senate negotiators to begin work on a compromise with the House for a Medicaid deficit appropriation bill.
Tuck said she's not going to name the negotiators until the House considers tapping into the health care trust fund.
Some lawmakers may be reluctant to use the trust fund because of a warning given to them earlier this session by State Treasurer Tate Reeves.
Reeves said Mississippi's credit rating could be weakened if lawmakers continue to dip into the state's reserve funds.
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