Skip to main content

Advanced Search

Advanced Search

Current Filters

Filter your query

Publication Types



Newsletter Article


States Wait for Word on Federal Medicaid Help

By Alex Wayne, CQ Staff

Feb. 18, 2010 -- At least 30 states are contemplating cutbacks to Medicaid, the health entitlement for the poor, beginning in July, unless Congress acts to keep extra money flowing into the program, the health consumer interest group Families USA said Thursday.

The 2009 stimulus law (PL 111-5) included $87 billion to increase the federal government's share of Medicaid spending and help states struggling with budget deficits. But the money runs out Dec. 31, and Congress has not given a clear indication of whether it will be extended.

Fiscal 2011 begins on July 1 for many states, rather than Oct. 1, the start of the federal fiscal year. Unlike the federal government, states must balance their budgets. If they can't count on the extra federal Medicaid money throughout their next fiscal year, states will make cuts to live without it, Families USA executive director Ron Pollack said in a conference call with reporters.

"If they don't believe this extension is likely, it is clearly likely we are going to see cutbacks in the Medicaid program," Pollack said. His group released a report Thursday detailing the budget woes facing states in 2011 and the legislative measures they are contemplating to reduce Medicaid's draw on their accounts. In most states, Medicaid is either the largest or the second-largest expenditure, even though the federal government is now picking up almost two-thirds of the cost of the program thanks to the stimulus spending.

Pollack's warning came the same day that the Kaiser Family Foundation's Commission on Medicaid and the Uninsured reported that nearly 3.3 million more people were enrolled in state Medicaid programs in June 2009 compared to the previous June, the biggest single-year increase ever. The jump, driven by job losses during the deep recession, pushed Medicaid enrollment to 46.9 million people, the study found.

"State Medicaid programs have been able to help millions of Americans who have nowhere else to turn in a recession," said Diane Rowland, executive vice president of the foundation and the commission. "But the states obviously face significant fiscal pressures as increases in enrollment push up costs at a time when state budgets are already severely constrained."

States are allowed wide latitude to set eligibility, payment rates and other variables within Medicaid in order to control spending. But under the stimulus law, states accepting the extra money were barred from reducing eligibility, in order to avoid adding thousands of low-income people to the ranks of the uninsured during the recession. That "maintenance of effort" requirement will expire when the extra money runs out at the end of December.

Pollack said that the cutbacks under consideration, in legislatures ranging from Arizona to Florida to Vermont, could result in perhaps a million or more people losing health insurance coverage, including children and pregnant women in some states.

Funding Extension
President Obama included $25.5 billion in his fiscal 2011 budget to extend the stimulus funding through June 2011, the end of states' fiscal years. The House included an extension of the extra Medicaid funding in a bill aimed at job creation that it passed in December (HR 2847). The Senate has not acted on the issue, and has given little indication of when or if it will. But lawmakers are under tremendous pressure from governors and advocacy groups such as Pollack's to resolve the situation.

Senate Majority Leader Harry Reid, D-Nev., excluded an extension of the Medicaid funding from a jobs-related proposal the Senate will take up next week as an amendment to the House jobs bill. But should the Senate pass its version of the legislation, the Medicaid provision could be added to the bill in a conference committee with the House. Or the Medicaid money could be included in a second jobs bill the Senate is expected to take up later this year.

"I think there is a reasonable chance that we could see an extension of the federal matching dollars," Pollack said.

Sen. John D. Rockefeller IV, D-W.Va., chairman of the Finance Committee's Health Subcommittee, has cosponsored legislation with Reid to keep the extra Medicaid funds flowing. "There is no question that we need to extend Medicaid relief — states need this help and we must move this process forward now," he said in a statement Thursday.

"State and local governments accounted for a loss of 41,000 jobs from December to January. If Congress does not act swiftly to extend state fiscal relief in a timely manner, it could cost the economy up to 900,000 jobs — this is unacceptable and preventable with swift action."

A spokeswoman for Reid, Regan LaChapelle, placed the onus for passing an extension of the extra Medicaid money on Republicans, who have enough votes to filibuster legislation in the Senate. "It is our hope that Republicans will step up and put the needs of their states and constituents above politics," she said.

Moderate Republicans, such as Maine's two senators, Olympia J. Snowe and Susan Collins, would be likely to support the Medicaid extension by itself, as would other Republicans from states facing serious budget problems. But they could oppose the measure if it is combined with more controversial proposals.

Publication Details