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States raise pressure on Congress to extend enhanced Medicaid spending

Rosalind Helderman

The National Conference of State Legislatures is again asking the U.S. Congress to extend enhanced Medicaid funding for states, given how many have adopted budgets assuming the increased federal aid would be forthcoming.

Virginia lawmakers didn't exactly assume they would see the new funds.

Instead, they adopted a budget that included some especially drastic cuts to health and human resources -- but then assured one another and the public that the cuts probably would not go into effect because Congress was on the verge of approving the the boosted federal aid. Lawmakers wrote into the budget a promise to use the new Medicaid dollars to erase the health-care cuts.

The federal stimulus bill included boosted Medicaid spending for states lasting until Dec. 31. States have sought an extension of the increased aid for another six months -- to June 30, 2011.

Almost two months later, Congress is still only on the verge of passing the extension. Both the House and Senate have approved jobs bills that include the money, but the measures are different. And Virginians are now getting nervous about the two chambers' ability to come to terms on a bill amid Washington's gridlock.

Virginians aren't alone. According to a chart distributed with the NCSL letter, 24 other states -- including Maryland -- passed budgets that assumed they would receive enhanced Federal Medical Assistance Percentages or FMAP.

Congressional leaders have said they support the extending the boosted Medicaid match and would like to see the extension approved by Memorial Day. So as the holiday weekend approaches, watch for the issue to become hotter.

If the increased spending is not approved by the start of the new fiscal year July 1, Virginia will have to begin budgeting on the assumption the money will not be arriving. The real crunch will come Dec. 31, when the boosted spending from the stimulus bill falls off.

What kind of cuts could be coming without the federal aid? In Virginia, thousands fewer poor children will receive health coverage under the state's FAMIS program.

And health-care providers already struggling to cover their costs would see significant drops in their reimbursement rates for providing services to Medicaid patients. The change could mean some institutions would close wings -- like maternity units -- or shutter altogether.

By Rosalind Helderman  |  May 11, 2010; 10:05 AM ET
Categories:  General Assembly 2010 , House of Delegates , Rosalind Helderman , State Senate  
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