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Senior Groups Say They'll Fight on for Higher Medicaid Funding

By John Reichard, CQ HealthBeat Editor

July 21, 2010 -- Despite doubts that Congress will pass legislation before the August recess to maintain higher levels of Medicaid funding, senior groups say they'll keep putting pressure on lawmakers to act this month.

"We keep pushing, because it's just a critical issue," Nora Super, director of federal government relations at the senior lobby AARP, said in an interview.

The issue of higher Medicaid funding isn't going away, despite repeated difficulties moving such legislation with lawmakers skittish about deficit spending. Speculation flared about a deal involving higher funding flared late Wednesday, but such rumors have repeatedly proved to be unfounded.

Advocates labor on, however.

In recent days AARP circulated a letter to each member of Congress calling on them to immediately pass legislation that would extend the higher levels of Medicaid funding afforded to states as part of the economic stimulus law.

The funding expires Dec. 31 and AARP, governors, hospitals and nursing homes are all advocating an extension until June 30, 2011 of those higher levels because of shortfalls in state revenues associated with the economic downturn.

"A quarter of all Medicaid beneficiaries are over 65 or are people with significant disabilities, making this vital program particularly important for our members," said the July 16 letter from AARP Senior Vice President David P. Sloane.

"Home- and community-based services, which are cost effective and allow people to stay in their homes, rather than be institutionalized, are likely to be among the first services slashed from state Medicaid programs because they are considered 'optional' services" that states are not required to cover, the letter from Sloane said.

States are reluctant to trim Medicaid because for each dollar they lop off they lose another dollar or so in federal revenue from the federal-state matching program. So to the extent they have assumed higher funding levels in their budgets and must now trim them with legislation to assure those levels stalled, cuts could come in spending on areas such as higher education, infrastructure and corrections.

In addition, the health care overhaul law and the economic stimulus law limit states' ability to reduce Medicaid benefits. But there are no restrictions on cutting payment rates to providers, which already are so low that Medicaid recipients have difficulty finding doctors.

Both the House and Senate have approved $26 billion to extend the higher "federal medical assistance percentage" (FMAP) payment rates until mid-2011. But they've done so in different legislation vehicles and a recent attempt to enlist the support of Maine Republican Sen. Susan Collins by trimming the FMAP relief package to $16 billion failed.

AARP and the National Council on Aging are planning other efforts to boost Medicaid funding levels, such as a July 29 event marking the anniversary of the legislation creating Medicare and Medicaid.
But Finance Committee Chairman Max Baucus, D-Mont., responded doubtfully Tuesday when asked whether he sees a path forward for Medicaid funding legislation before the Senate winds up its business the first week of August.

"It's just a matter of scheduling," he said "There's so much" [the Senate needs to do]. "I don't know."

Lobbyists say that election year political considerations may mean action on higher funding is more likely to come in a lame-duck session at the end of the year. Congressional candidates fear they will be punished at the polls for votes that ignore growing concerns about the federal deficit.

Another issue is that expiration of the higher funding levels is not imminent. "The urgency may not be there because it doesn't expire until the end of the year," Super said.

Another lobbyist who declined to be named in order to be able to speak more freely said that while hospitals, governors and senior groups will keep pushing events to put the pressure on lawmakers, the key is finding out what will "move the needle" to turn opposition by Collins, Sens. Olympia Snowe, R-Maine, and Ben Nelson, D-Neb., to support higher funding levels. It could be pressure from a governor, a local senior group or a hospital association, the lobbyist said. Their support would give such legislation the 60 votes needed to move through legislation through the Senate, the lobbyist added.

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