States will Face Tough Choices Without Extended Medicaid Funding – Say Ahhh! A Children’s Health Policy Blog

As we’ve noted previously Congress has yet to reach agreement on extending the increased Medicaid funding
it originally granted in the 2009 economic recovery legislation.  The increased payments are scheduled to
end in December 2010, but most state budgets are looking no better than they
were a year and a half ago
.  It seems like federal lawmakers would
like to help states maintain Medicaid for the children and families who need
it–Medicaid fiscal relief has passed both houses of Congress separately, but
never in the same piece of legislation, so it is not law.

About half the states responded to this demonstrated
interest by Congress–they included a six month extension of the increased
Medicaid funds in their fiscal year 2011 budgets (see the map that employs data
from the National Conference of State Legislatures) .  Since fiscal 2011 is already underway,
states will be forced to make jarring budget adjustments if the extension does
not come through.  

fmap map.jpg

(Click to enlarge graphic)

In its
absence, states will face budget holes of tens of millions in smaller states to
more than a billion dollars in states like New York and California.  That means cuts to services state
residents depend on or tax increases at a time when the economy remains
fragile.  And because federal law
protects eligibility standards and procedures in Medicaid, only limited parts
of the program can be cut by state policymakers.  That makes the Medicaid funding extension an issue for all
parts of the state budget–from education to economic development to the support
for local governments that funds police and fire services.  Failure to extend Medicaid funding will
have a ripple effect through the budgets and economies of many cash-strapped

The U.S. Senate moved yesterday toward extending unemployment
benefits for those who have lost their jobs, recognizing that the recovery has
not yet reached many workers.  It
hasn’t reached state budgets either, so an extension of Medicaid fiscal relief
would help states maintain the services that families are counting on now more
than ever.        

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