FRANKFORT, Ky. (LEX NEWS) — Update: July 22 at 7 p.m.

Gov. Andy Beshear announced he will use $255 million in state surplus funds to prevent a 4 percent reduction in Medicaid that was scheduled to begin August 1.

Beshear said Kentucky has $781 million in surplus funds currently available. Rather than directing all of it to the state's rainy day fund, he said he will use $255 million to close the Medicaid funding gap for the budget year.

"We have the dollars to make a difference," Beshear said on Wednesday.

According to the Kentucky Cabinet for Health and Family Services, about 36 percent of Kentucky's population receives Medicaid benefits — nearly 2 out of every 5 people.

Healthcare providers and patients have spoken out against the cuts for months.

When asked what his message was to Kentuckians who have been protesting the scheduled cuts, Beshear said he was optimistic but acknowledged uncertainty ahead.

"My message to them is I'm excited to provide a year's worth of relief. They can breathe out as long as we're not sued over this for the next year. But there's work to do in that year. to fix it for the following year and then hopefully, to cement in the General Assembly the belief that healthcare is a basic human right," Beshear said.

The governor said he is making the budget move based on public statements from Republican leaders in the General Assembly, who he said indicated they had given him flexibility. He said he is now acting on that flexibility — though he acknowledged a legal challenge could still threaten the plan.

Rep. David Osborne, Kentucky's House Speaker, responded to the announcement with a statement pushing back on the governor's framing.

"Lawmakers approved more funding for Medicaid than the governor requested in the budget proposal originally filed by the House Minority. Neither the governor, nor his administration have provided any actual evidence of why they need more money. Rather than frightening vulnerable Kentuckians - including children, individuals with profound disabilities, and seniors - with threats of cuts, it's time to stop crying wolf and start managing Medicaid with the seriousness, transparency, and accountability Kentuckians expect," said Osborne.

Original Story:

Kentucky Gov. Andy Beshear said Wednesday there will be no 4% cut to Medicaid funding, citing what he described as a strong financial position for the state.

During a press conference, Beshear said Kentucky has $781 million in available surplus funds, made up of the previous fiscal year's budget surplus and an additional $350 million in tax revenue.

"The budget surplus from the last fiscal year and the $350 million in extra tax payment provide a total of $781 million in surplus funds available right now," Beshear said.

The governor said those funds will allow the state to avoid reducing Medicaid funding.

Following Beshear's announcement, Kentucky House Speaker David Osborne criticized the governor's handling of the issue.

"Lawmakers approved more funding for Medicaid than the governor requested in the budget proposal originally filed by the House Minority," Osborne said in a statement. "Neither the governor, nor his administration have provided any actual evidence of why they need more money."

Osborne also accused the governor of unnecessarily alarming Kentuckians about potential cuts.

"Rather than frightening vulnerable Kentuckians—including children, individuals with profound disabilities, and seniors—with threats of cuts, it's time to stop crying wolf and start managing Medicaid with the seriousness, transparency, and accountability Kentuckians expect," he said.

Meanwhile, the Kentucky House and Senate Democratic Caucuses released a statement praising Beshear's Medicaid program action plan: