Senate Dems will keep pushing for Medicaid aid to ailing states

Emergency Medicaid funding will remain a part of the Senate’s failed tax package, a key Senate Democrat insisted on Friday.

Some Democrats have weighed the possibility of separating the Medicaid provision — which would extend emergency federal funding through the first half of 2011 — in hopes of passing it more quickly and preventing severe budget cuts by cash-strapped states, which will begin as early as this week.

ADVERTISEMENT
But Sen. Debbie Stabenow (D-Mich.) said Friday that that’s not the Democrats’ plan.

“That’s part of the [tax] bill,” Stabenow told reporters on a phone call. “It’s in there because we’re committed to keeping it in there.”

Stabenow said that, if a deal is struck, the package could hit the floor at any time. But until then, it will remain just that: a package.

“At any time we could bring this back for a vote,” said Stabenow, a member of the Finance Committee. “We could pass it in five minutes.”

The 2009 economic stimulus bill included $87 billion in Medicaid funding to help states weather the recession. The funds expire at the end of 2010, leading Democrats to propose a six-month extension — time enough to see the states through the 2011 budget year. The initial proposal would have increased Medicaid’s Federal Medical Assistance Percentage (FMAP) by 6.2 percent over that span.

That proposal has ran into a buzz saw in the Senate, where Republicans objected to the pricetag. The impasse prompted Democratic leaders to scale back the extra Medicaid funding from $24 billion to $15 billion. It was killed Thursday along with the rest of the tax extenders bill, when a procedural motion failed on arguments that the overall package would add to the deficit.

Michael Leachman, senior policy analyst at the Center for Budget and Policy Priorities (CBPP), a liberal policy group, said that 22 states and the District of Columbia have already passed budgets presuming that the additional six months of funding is forthcoming. If Congress doesn’t pass the enhanced FMAP extension this month, he said, those states will likely begin cutting other programs next month.

“Many of the cuts will start on July 1,” Leachman said. “It’ll slow the economic recovery.”

Robert Blendon, health policy expert at Harvard University, had a slightly different take, arguing that the immediacy of the state cuts hinges on the likelihood of Congress approving the emergency funding before the start of next year.

“If you’re absolutely sure they’ll pass it, as governor, then you wouldn’t do anything,” Blendon said “But if there’s uncertainty,” he added, states should start budgeting for the worst.

If the issue is partisan on Capitol Hill, it’s hardly so in the states. In February, a long, bipartisan list of state governors urged Congress to approve the additional six months of emergency funding, at the 6.2 percent rate.

“The length and depth of the recession means states and territories will continue to face significant budget shortfalls long after the enhanced FMAP provisions expire at the end of this calendar year,” wrote the governors, representing 42 states and five U.S. territories.

Still, Democratic leaders couldn’t convince a single Republican to back the extenders package, which would have added $33 billion to the federal deficit. They also lost Democrat Ben Nelson (Neb.) in Thursday’s vote.

The stalemate has caused Democrats to abandon the tax bill — at least for the time being. A spokesperson for Senate Majority Leader Harry Reid (D-Nev.) said Friday that the ball is in the Republicans’ court. “We support it, and it’s paid for,” the aide said of the Medicaid funding. “But we’re going to need Republican support.”

Stabenow said that lobbying from GOP governors might offer the best chance for the Medicaid provision.

“What would be most helpful to us,” Stabenow said, “would be to have the Republican governors talking to their Republican colleagues.”

Meanwhile, Sen. Sherrod Brown (D-Ohio) said Friday that he would continue his push to attach an amendment to the tax package extending federal subsidies for COBRA health benefits for the unemployed. The enrollment deadline for the COBRA subsidy program, like that for unemployment benefits, came and went on June 1. As a result, more than 144,000 families are expected to lose out on those benefits each month, according to the National Employment Law Project, an advocacy group.

A failure to extend the safety net programs while unemployment rates are stick tickling 10 percent, Brown warned, would threaten the fragile recovery.

“That just undoes the advantages — the positive side — of the stimulus,” Brown said.