KY gov announces foster care, Medicaid reimbursement, other program cuts

Several social service programs in Kentucky are about to see cuts and reductions, Gov. Andy Beshear announced Thursday. 

Beshear, a Democrat, blamed the cuts on the two-year state budget passed by the Republican-controlled General Assembly this year. 

“I repeatedly warned the General Assembly about the painful impacts that would be felt from their budget cuts or failure to increase funding for services that cost more every year, or where there are more families that now qualify,” Beshear said during his weekly press conference. “Sadly, action was not taken to correct the most concerning areas. Now the state is forced to bear the outcome of these short-sighted decisions and the chronic defunding from the federal government.”  

Dr. Steven Stack, the secretary of the Cabinet for Health and Family Services for the Beshear Administration, said several sectors will be impacted. 

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“Anyone who is purchasing gasoline or groceries knows that costs have gone up,” Stack said. “Those same costs have certainly impacted the cost of providing medical care, the cost of providing foster care services, foster parent support, foster home support, the cost for providing meals through our nutrition programs. Those costs have gone up, but our funding has gone down, and in some areas gone down quite significantly.” 

He did not go into full details and dollar amounts, but announced these general cuts and reductions: 

• Most providers in the Medicaid program will see rate reductions starting in fiscal year 2027. Reductions will not be uniform, and more details will be released “in the very near future.” 
• There is not enough money to sustain the senior meal program. 
• Temporary Assistance for Needy Families (TANF) will see “additional reductions.”  Last October, the Beshear administration reduced cash payments that low income Kentuckians can get through the Kentucky Transitional Assistance Program (KTAP), which come from TANF. 
• Foster care providers will see some reductions in rate payments, though it’s unclear what that will look like. Stack said, “actions will have to be taken regarding the foster care network, regarding the foster homes and the rates that they receive for payments, as well as a number of special programs that are put in place to help support foster children to overcome the adversities they face and to help them have their best opportunity to thrive again.” 
• There is not enough funding to maintain the number of social workers the state has.  
• Behavioral Health services will be impacted but it’s unclear how. 

“None of these are things that we want to do,” Stack said. “And we really regret that the budget given to us by the General Assembly makes these actions necessary.” 

House Speaker David Osborne, R-Prospect, called Beshear’s announcement a “cruel and unnecessary blow to agencies that serve our state’s most vulnerable and I urge him to reconsider his decision.”

“We gave the governor and his administration the flexibility to use existing state funding to protect priority services like those for vulnerable Kentuckians when making reductions. We also directed the administration to prioritize state spending and seek savings by addressing outdated and ineffective programs, as well as services already provided by other agencies or the private sector,” Osborne said in a statement. “Instead of doing so, he makes abundantly clear what he and his administration choose to prioritize. After all, he consistently finds the funding needed to expand state government when he wants to — including a Pre-K for All initiative that failed to receive support because he failed to produce an actual plan. The fact is, his priorities and actions simply do not reflect the state’s needs.”

Dustin Isaacs, a spokesman for Senate Republicans, said in a statement that “We will continue to monitor the situation as more information becomes available, but would not have additional comment at this time.”

“It appears the Beshear administration is still assessing what discretionary decisions it will make,” he said. “At this point, lawmakers have not been provided with specific details—or information regarding how those decisions are being made.”

‘A Kentucky problem’ 

Norma Hatfield, a longtime state-wide kinship care advocate and kinship caregiver, acknowledged “real funding challenges at both the federal and state levels” but questioned if leaders have done everything possible to “mitigate the impact” of those challenges.  

“I have heard a lot about who is to blame. What I haven’t heard enough about is what was done to prevent these outcomes in the first place,” Hatfield said. “Were all options explored? Were priorities reevaluated? Did everyone in positions of authority do everything they could to protect vulnerable Kentuckians before announcing reductions?” 

She called on Kentucky leaders to engage in “less finger-pointing and more problem-solving.”

“This isn’t a Republican problem or a Democratic problem,” Hatfield said. “It’s a Kentucky problem. Kids sleeping in office buildings, seniors depending on meal programs and families struggling to get by should never become collateral damage in political battles.”