We begin tonight in Frankfort.

State lawmakers continue to debate how to reduce the cost of Kentucky's Medicaid program.

Our John Lefler has more on what changes.

Are coming in tonight's legislative update.

To look at our most vulnerable Kentuckians, but also balance that approach with the fiscal responsibility and the sustainability that will be required in the future for this.

That balance is the recurring debate around the state's publicly funded health plan for low income Kentuckians.

Republican Stephen Meredith consistently touts the importance of the program for rural health and rural economies.

You know, whenever we have a shortfall, it's reduced reimbursement.

We're talking about cutting services.

Even the optional services.

I don't know anyone here that I'd really want to cut, because I think there's cost downstream that we're not going to realize is.

Senator Adams.

Right.

Quote me saying we don't measure the cost of doing nothing and we can't afford to do that.

But again, let's to all get on the same page on how we want this program to work and be effective.

Nobody wants to kick people off Medicaid.

It's a needed service is not going to go away.

So how can we do this as well as we possibly can?

State Medicaid officials presented what Kentucky's plan currently covers.

But when we look at what is federally required, and then we look at what we have added as a state for services that we think are worthwhile for our constituents.

How much of what we are spending is state mandated that we could actually control?

I think budgetary what is a large, increase in what's federally mandated and what we've done through the state is our directed payments.

They might have a great purpose, and we're not we're not here to say whether they're important or not.

But, state directed payments to hospitals is what has significantly increased our budget over the past five years.

A key policy report released this week says state directed payments to hospitals totaled $5.3 billion in 2025.

The report, detailing the threats to rural hospitals, says changes from the one big, beautiful bill could reduce those dollars by 90%.

Governor Beshear took 255 million state surplus dollars this summer to block Medicaid cuts to providers.

He suggested even more surplus dollars could go towards the program.

After an economic forecast meeting this week and come January, Medicaid community engagement requirements will take effect, potentially kicking hundreds of thousands of recipients off the program.

Reducing costs that way.

For Kentucky edition, I'm John Leffler.