Senate Dems explore phase-out of Medicaid enhanced funding

Congressional Quarterly: Senate Democrats are negotiating with "a pair of pivotal Republicans" a slimmed-down version of the tax bill that they were unable to clear last week. "The most significant change being discussed would shrink the cost of a $24.2 billion provision that extends extra federal Medicaid funds to struggling states." CQ reports that the new version, which has been circulated among lobbyists but was not officially released or confirmed by lawmakers, would gradually decrease the enhanced federal Medicaid match included in last year's stimulus bill. "The previous version of the bill would have cost about $118 billion and increased the deficit by $55.1 billion. That was the main reason that moderate Republicans and two Senate Democrats refused to support a debate-limiting cloture motion June 17. It was not clear Tuesday how the changes being discussed would affect the deficit impact or the cloture vote count."

The new version of the bill "does not include Medicare 'doc fix' provisions that the Senate passed separately on June 18. That bill (HR 3962) would prevent, through Nov. 30, a cut in Medicare payment rates for physicians" (Rubin, 6/22).

The Hill: "Additional federal funding for state Medicaid programs would slowly phase out next year, according to the latest version of the Democrats' substitute tax extenders bill floating around Tuesday."

Based on the 2009 economic stimulus bill, "states received at least a 6.2 percent increase in the federal share of Medicaid funding, but that extra help expires at the end of 2010. … Democrats are now proposing to provide a 5.3 percent increase in federal Medicaid funds in the first quarter of 2011, and a 3.2 percent increase in the second quarter of 2011" (Lillis, 6/22).