Andy Beshear Uses $255 Million Surplus to Reverse Medicaid Cuts

Governor Andy Beshear announced on July 23, 2026, that his administration will apply $255 million from a state budget surplus and unexpected corporate income tax revenue to reverse a planned 4% reduction in Medicaid provider reimbursement rates. The cuts, which were scheduled to take effect on August 1, would have impacted several waiver programs for the elderly and people with disabilities, including the Michelle P., Model II, and Home and Community Based waivers.

The decision follows protests in Frankfort by disability advocates and families who highlighted that nearly 19,000 people remain on waitlists for these services. Beshear attributed the funding gap to the budget passed by the Republican-controlled General Assembly, stating the surplus allows him to provide relief for those relying on Medicaid.

House Speaker David Osborne rejected the governor's narrative, accusing him of "crying wolf" to frighten vulnerable citizens. Osborne asserted that lawmakers had actually approved more Medicaid funding than Beshear originally requested in his budget proposal. While Democratic caucuses praised the move, they and other advocates noted that the fix is temporary. The funding only covers the current fiscal year, and state officials warned that projected cuts for 2028 are larger than those recently averted, leaving long-term stability to be addressed during the 2027 legislative session.