States worry about Medicaid funding caught in Congressional impasse

Washington Examiner: "Lawmakers in Virginia and Maryland are bracing for a congressional impasse over millions of dollars in health care funding that threatens to thrust both states into the red. The Medicaid funding is set to expire in January, and a measure to extend it is stalled in the Senate over concerns about the ballooning federal deficit. Virginia lawmakers created a plan for $430 million in cuts through fiscal 2012 if the extension isn't approved. But roughly one-third of those cuts hinges on reducing Medicaid eligibility, which the new federal health care law makes illegal. Maryland is facing an even larger deficit, because Gov. Martin O'Malley built the state's $389 million in federal funding into the fiscal 2011 budget. O'Malley plans to shore up the loss by raiding a $200 million state surplus expected in fiscal 2011 and draining the rest from the local income tax reserve -- marking the third consecutive year the state has tapped the fund" (Peterson, 6/22).

The Hill Blog: "The country's Medicaid directors are throwing their weight behind legislation to extend a temporary increase in federal funding — money on which many state legislatures are already banking. … The directors' concerns highlight a central flaw in the funding of Medicaid: enrollment in the program tends to skyrocket during economic downturns, at precisely the time that states are least able to afford the extra costs" (Lillis, 6/21).

The Maine Public Broadcasting Network (MPBN): "The state's coffers will be $85 million short when the fiscal year begins July 1st, if Congress fails to provide the additional Medicaid funds that state budget writers were counting on. While the state of Maine is expected to end this fiscal year with a surplus, a shortfall is looming for the new fiscal year because of a battle in Congress over Medicaid funding. Maine, like 25 other states, had expected to get an additional six months of extra Medicaid funding" (6/21).

McKnight's Long Term Care News: "Despite back-to-back defeats on the measure, Senate Majority Leader Harry Reid (D-NV) said he has no plans to table debate on an extenders bill containing nearly $25 billion in additional Medicaid funds for states" (6/22).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.