Rockefeller Proposes Increasing Federal Matching Funds For Medicaid In Senate Jobs Bill

Inside Health Policy is reporting that Senate Finance health subcommittee Chair Jay Rockefeller (D-WV) is considering “using the jobs bill under discussion in the Senate to extend enhanced federal Medicaid matching funds, the first provision to be carved out of the health reform effort even as Democrats vowed to continue fighting for a comprehensive reform bill.” The additional federal dollars would help struggling states meet the demands of increasing enrollment and reduce the need for tax increases or cuts to other essential state services.

In 2008, states reduced Medicaid payments to hospitals and other health care providers to compensate for budget shortfalls even as enrollment in Medicaid grew 2.6%, up significantly from 0.7 percent in 2007. The Recovery Act increased the federal government’s Medicaid contribution to help states maintain their health programs during the recession, but that extension expires on December 31, 2010 “in the middle of most states’ fiscal years.” Many states are already struggling to keep up with the exploding growth in safety net programs, due to rising unemployment and increasing health care costs.

In Kentucky, Gov. Steve Beshear’s proposed budget “calls for spending an additional $782 million on Medicaid over the next two years.” However, Beshear is also calling for $108 million in cuts to the program over two years, and 2-percent nearly-across the board cuts to Cabinet for Health and Family Services program.” Vermont would have to invest $53 million “to close the gap between available revenues and expenditures next year” in its human service programs and New York is contemplating cutting Medicaid reimbursements to hospitals and nursing homes to reduce Medicaid spending by a $1 billion.

It’s not clear that Rockefeller’s proposal will garner significant Congressional support. The Hill reports that “some of his colleagues are skeptical of his proposal, arguing the funds would not be used directly to create jobs.”