Cash-strapped states press Congress for more Medicaid help

States are turning up the pressure on federal lawmakers to help them pay their Medicaid bills, cautioning that they’ll otherwise face a dire fiscal situation that could hurt their economic recovery.

The state-federal health program for the poor consumes more than 20 percent of state spending, according to the National Governors Association, and without extra federal funds advocates say states will have to raise taxes, slash social spending or cripple their Medicaid programs.

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They want lawmakers to extend for six months — until June 30, 2011 — enhanced Medicaid payments that were part of last year’s recovery act. The measure would cost $24 billion, and was stripped from the tax extenders package that the House approved on the Friday before the Memorial Day recess, on May 28.

“The failure to extend special fiscal relief for state Medicaid programs will cause enormous harm to low-income families,” Ron Pollack, executive director of the consumer health organization Families USA, said in a statement. “It will result in cuts to Medicaid benefits, increases in out-of-pocket health costs that low-income families must bear, and will lower payments to health providers, thereby making needed care unaffordable and unavailable.”

The statement accompanies a new report from the advocacy group that breaks down how much of the $24 billion each state would get. Lawmakers from New York, California, Texas, Pennsylvania and Florida can expect to be under considerable pressure since those five states should benefit the most from the extra federal funding, according to the report — from $3.3 billion in New York to $1 billion for Florida.

The group is also pushing for lawmakers to extend a 65 percent COBRA subsidy so people laid off after May 31 can get help paying for their health insurance. The report shows that without the subsidy, the average family would have to pay $1,107 a month for COBRA coverage — more than 84 percent of their unemployment benefits. With the subsidy, the average family cost of COBRA coverage falls to $387 a month.


The $8 billion COBRA provision was also taken out of the tax extenders bill that the House passed in May. House Speaker Nancy Pelosi (D-Calif.) raised hopes on Tuesday that Congress would tackle both the Medicaid payments and the COBRA subsidies when she told liberal bloggers that they were still priorities.

Michael Bird, senior federal affairs counsel for the National Conference of State Legislatures, said 15 states are awaiting action from Congress so they can finish writing their budgets for 2011. Fourteen of those states’ fiscal years start next month, while Michigan’s starts Oct. 1.

He said he’s hopeful that the measure will pass Congress as part of the tax extenders package since both chambers have already passed the Medicaid extension at one time or another — the Senate once and the House twice. In each case, the extension was considered emergency spending and was not offset by tax increases or cuts to other programs.

Bird added that state officials are now talking directly to their congressional delegations and explaining to them what the looming cuts would mean to their constituents.

“It’s 'all hands on deck' right now,” Bird said. “I don’t see any other vehicle before the election that can handle this.”