LITTLE ROCK -- Gov. Mike Huckabee reversed himself Wednesday and said he would use money from the state's $1.6 billion tobacco settlement to save Medicaid services for thousands of Arkansans.

Huckabee announced his plan to use $2.9 million of tobacco money earmarked for expanding Medicaid services for adults ages 19-64 to offset planned cuts that would have eliminated the medically needy category on March 1. That category of Medicaid covers about 30,000 people, recipients who are not typically Medicaid eligible but become so temporarily because of catastrophic medical problems that result in high bills. It also includes hundreds of low-income Arkansans with serious illnesses that carry large medication and treatment expenses. Last week, Huckabee announced that an advance payment from the University of Arkansas for Medical Sciences would provide $1.5 million to save TEFRA, a Medicaid program that pays medical bills and offers services for 3,000 children with severely disabling or life-threatening disorders. "We've dealt with the issue at hand," the governor said at a Capitol news conference. "Services are being continued without disruption and interruption." Huckabee had insisted that tax increases and the tobacco settlement spending plan passed by voters in November 2000 were off-limits to those looking for ways to offset some of the $142 million in budget cuts. The spending plan, pushed by the Coalition for a Healthy Arkansas Today, set up a $100 million trust fund and allocated annual payments totaling about $55 million from to health research, treatment and smoking prevention and cessation programs. The governor announced the budget cuts Nov. 14 to address an economic downturn. Some solutions proposed to address the Medicaid cuts would have required legislative action in a special session. "The way we're announcing ... gives us the ability to answer the need without having to have a session, without having to change the CHART formula," Huckabee said. "It totally keeps faith with the program and the voters, and the intentions." On Nov. 30, the state Department of Human Services announced plans to eliminate the medically needy category in an effort to trim $12.8 million from Medicaid as part of the agency's share of the budget cuts. The announcement created an uproar among parents and advocates for recipients of services that range from developmentally delayed children to senior citizens who receive health care in their homes. Hundreds of people have attended meetings and rallies to oppose the cuts, alongside legislators who offered numerous solutions, including tapping the tobacco settlement money. "I'm pleased they were able to save medically needy program, just as I was pleased about last week," House Speaker Shane Broadway, D-Bryant said. "We're disappointed that it doesn't take care of all the Medicaid cuts. Our plan would have allowed for that, and it would have paid counties (for holding state prisoners) and opened prison beds" As late as Tuesday, Huckabee said he would meet with Broadway and Senate leader Mike Beebe to discuss their proposal to transfer tobacco money from anti-smoking programs into Medicaid. It also would have provided $4.5 million to reimburse counties for holding state prisoners and $1.4 million to help ease prison overcrowding.

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