BAKKEN BREAKOUT WEEKLY
BAKKEN NEWS Medicaid cost rises with oil
By DALE WETZEL Associated Press
oil prosperity will require the state to spend $113 million more on Medicaid and other human services programs to keep the state’s present level of aid to the poor, the state budget director said March 13. Medicaid’s cost is split between the
federal government and state govern- ments. The program provides health care for low-income North Dakotans and pays nursing home bills for seniors. States’ share of Medicaid payments
BISMARCK, N.D. — North Dakota’s
for Medicaid, so the feds reduce their payment to the state,” Sharp said. Sharp on March 13 briefed members
of the Legislature’s Budget Section, a committee that includes members of the budget-writing committees of the N.D. House and Senate, about the situation. As recently as 2004, North Dakota
taxpayers provided 29 cents for every Medicaid dollar spent, federal data say. On Oct. 1, the state’s share will in-
are normally calculated each year. The federal government pays a larger share of costs in states with per capita incomes that are lower than the national average, according to the federal Department of Health and Human Services. North Dakota’s oil boom has raised
state incomes and has gradually in- creased the state’s share of the cost of Medicaid and other programs, said Pam Sharp, director of North Dakota’s Offi ce of Management and Budget. “The stronger a state’s personal in- come is, the better our ability is to pay
crease to 48 cents of every dollar. Debra McDermott, a North Dakota Depart- ment of Human Services analyst, said on Oct. 1, 2013, the share is likely to rise to 50 cents, which is the maximum any state must pay. To maintain North Dakota’s services
for Medicaid and other human services programs supported by the federal gov- ernment, state taxpayers will have to pay an additional $21.2 million from Oct. 1 until June 30, 2013, when the state’s two- year budget period ends, Sharp said. The added cost for North Dakota’s 2013-15 budget will be about $92 mil- lion if lawmakers decide to maintain the existing level of services, she said. Last January, an average of 546,000 barrels of oil were pumped from 6,330
North Dakota wells each day. In Janu- ary 2006, the state was producing 98,500 barrels daily, from 3,264 wells. Taxes on the oil production have
fattened North Dakota’s treasury. Last month, the state had almost $1.5 billion in reserves, state Offi ce of Management and Budget data show. North Dakota’s current two-year general fund budget is $4 billion. The state’s general treasury is likely
to have a surplus of at least $592 million on June 30, 2013. That is a 55 percent in- crease from four months ago, when the surplus was estimated at $383.2 million. When the North Dakota Legislature
Bakken Breakout publishes bi-monthly and takes an in-depth look at oil exploration and production in the Williston Basin, providing important information about one of the hottest shale plays in the world today.
fi nished work on the state’s current two- year budget last April, lawmakers esti- mated that oil prices would run between $72 and $75 a barrel over two years, and that the state’s oil fi elds would produce about 400,000 barrels a day. Oil prices have hovered above $90 a
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barrel, and North Dakota’s production is more than 550,000 barrels daily and expected to rise, Sharp said. Moody’s Analytics, an economic forecasting fi rm the state uses to estimate tax revenues, expects the price of oil to exceed $100 a barrel next year, she said.
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Thursday, March 22, 2012 ■ Page 7
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