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Washington action spotlights Va. legislative divide on Medicaid

Rosalind Helderman

The agreement Tuesday night in the U.S. Senate on the jobs bill that had been blocked for several days by objections from Kentucky Sen. Jim Bunning (R) has made more relevant one of the stickiest conflicts in the budgets adopted by Virginia's Senate and House of Delegates.

That's because the same federal bill that Bunning had been blocking, which got attention mostly because it includes extension of unemployment benefits for thousands of people out of work, also includes huge amount of new Medicaid funding for states, designed to help them cover their costs in the economic downturn.

Final passage of the federal bill would mean $360 million in enhanced Medicaid funding for Virginia, available before June 30.

So why the conflict?

In its budget, the Virginia Senate included language indicating it would devote the new Medicaid money, if it arrives, to health care costs. For instance, the Senate would use the funding to eliminate a proposed 4 percent cut in reimbursement rates to hospitals and nursing homes that would otherwise be included in its budget.

The House, on the other hand, has written into its budget that it would use $294 million of the $360 milion in new federal Medicaid funds in areas other than health care. The House would use some of the pot of money on funding for local schools. Some of the money would also be used to fund a 3 percent bonus for state employees whose salaries have been frozen for the last two years.

The Virginia Hospital and Healthcare Association has cried foul over the House proposal. They note that if the enhanced Medicaid funding comes through, the House budget would still include $986 million in health care cuts. The Senate budget would include only $472 million, a less severe hit than had been proposed by former Gov. Tim Kaine (D) in the budget he unveiled in December.

"No one would think it reasonable to transfer federal dollars received for education or transportation to Medicaid, so it is hard to understand why anyone would believe that transferring [Medicaid[ money to non-Medicaid programs is an acceptable budget strategy," association president Laurens Sartoris wrote in a letter to House Speaker Bill Howell (R) this week.

Leading House budget writer Del. Kirk Cox (R) said his chamber believed using the federal dollars for Medicaid would mean using one-time funds that will dry up in the summer for ongoing health care needs. "The Senate is structurally imbalanced because of this--they'd use those funds for ongoing operating expenses," he said. Cox said that is why the House agreed put the funds to one-time expenses, like the employee bonus.

The issue is sure to be one of the most difficult faced by budget negotiators for the House and Senate when they start meeting later this week.

By Rosalind Helderman  |  March 3, 2010; 2:30 PM ET
Categories:  General Assembly 2010 , House of Delegates , Rosalind Helderman , State Senate  
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"The Senate is structurally imbalanced because of this--they'd use those funds for ongoing operating expenses," he said.

which party runs the Senate?

Posted by: millionea7 | March 4, 2010 10:00 AM | Report abuse

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