Kentucky Governor Andy Beshear said Wednesday he will use millions in state surplus funds to close a Medicaid funding gap and reverse a 4% cut that was set to take effect August 1.
The move affects an estimated 1 million Kentuckians who are on Medicaid through this fiscal year, which concludes at the end of June 2027.
During a news conference in Frankfort, Beshear said the state’s budget had a projected $156 million shortfall for fiscal year 2026, but instead saw a $476 million surplus, in part, thanks to the collection of more than $350 million in corporate income tax payments made in July.
The governor said the budget surplus from fiscal year 2025, combined with that $350 million in extra tax payments, leave $781 million in surplus funding available in the state right now.
The governor blamed the state budget lawmakers passed this legislative session for the cuts. While Republicans said the budget set aside $290 million to address rising Medicaid costs, Beshear said the budget cut Medicaid by $2.7 billion and would hurt Kentucky families by “fueling hospital and clinic closures, rate cuts and elimination of services like hospice, mental health services and more.”
Beshear said the funds would typically go into the state’s rainy day fund, and despite the investment in Medicaid and the reversal of cuts, more than $400 million will still be deposited into that fund.
The funding announced Wednesday will close the gap and fund the additional costs of existing waiver slots that Beshear said were underfunded.
It will also add an additional $4 million to the state’s senior meal program for the fiscal year 2027.
Source: WDRB
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