By Sarah Ladd, Kentucky Lantern · July 22, 2026

FRANKFORT — Thanks to an “unanticipated” corporate income tax payment and revenue surplus, Gov. Andy Beshear announced Wednesday that Medicaid providers will not suffer a 4% reimbursement cut after all. 

Beshear said $255 million from the taxes, as well as additional revenue, will delay any cuts to Medicaid reimbursement through this fiscal year, which ends at the end of next June. 

It will also fund the state’s senior meal program and Michelle P. Waiver slots, which are Medicaid waivers for Kentuckians with intellectual or developmental disabilities who need nursing facility or immediate care facility level of care. 

Beshear said he does not know which company submitted the tax payments — “and the Department of Revenue isn’t allowed to tell us” — and therefore said not to count on that money every month. He also said that “this isn’t any type of data center payment.” 

“Thanks to strong fiscal management by my administration and a strong economic surge late in the fiscal year, we turned a $156 million deficit into a $476 million surplus,” Beshear said during a press conference in Frankfort. “Additional good news… we believe that the surge is going to continue.”  

This comes after hundreds of Kentuckians rallied in Frankfort for a reversal of the cuts, especially those affecting Medicaid waivers, last Friday.  

Kentuckians with disabilities, advocates say looming 4% Medicaid cut is a ‘threat’

The Beshear administration had, in June, informed various providers they would see a 4% reduction in Medicaid reimbursement starting Aug. 1. He said Wednesday that new notices will go out to providers “shortly.” 

Beshear blamed the budget passed by the General Assembly this year for forcing his hand toward the cuts, while lawmakers said he could better manage the money they provided. 

Beshear is redirecting $4 million into the Senior Meal program, fully funding all authorized Michelle P. Waiver slots and putting $18 million into the road fund. The latter was a point of contention between his administration and the General Assembly. When Beshear, in May, signed an executive order to reduce the gas tax by 10 cents (and later, he extended the reduction to localities that asked him to), lawmakers said the move would cost the state’s road project fund $26.8 million for one month. 

At that time, Sen. Jimmy Higdon, the Lebanon Republican who chairs the Senate Transportation Committee, said lawmakers could consider reducing road funding from local governments that participate in the gas tax reduction. 

Beshear said all the financial changes announced Wednesday only apply to this fiscal year and said the legislature “absolutely” needs to reopen the budget in January and ensure enough funding for the next fiscal year.  

“Today is not a magic wand. It’s not a magic bullet,” Beshear said. “There are still people out there suffering, but I know that there will be fewer that suffer in order to get their services because of this movement.” 

This story may be updated.