Economic Stimulus Plan Would Increase Medicaid Dollars for States
Democratic plans to include an increase in the percentage of matching funds states receive for Medicaid as part of an economic stimulus package might meet "resistance from Republicans, although they might be willing to allow the provision in exchange for some of their priorities," CongressDaily reports (Johnson, CongressDaily, 1/17).
Increasing the federal medical assistance percentage would help states maintain Medicaid eligibility levels at a time when more people are likely to become uninsured because of job loss and apply for Medicaid benefits, according to David Parrella, chair of the National Association of State Medicaid Directors and director of the Connecticut Medicaid program (Reichard, CQ HealthBeat, 1/16).
The increase would be worth several billion dollars and would provide an immediate boost to states, although funds would be limited to use on Medicaid, according to aides. The provision is being based on language included in the last economic stimulus package, under which states received a 1.5% increase in federal matching funds for six fiscal quarters (Johnson, CongressDaily, 1/16). Lawmakers crafting the economic stimulus package are willing to spend as much as $100 billion to try to "counter a recession that they worry may already have begun," according to the Washington Post (Weisman/Birnbaum, Washington Post, 1/17).
HHS Secretary Mike Leavitt on Wednesday said he opposed an increase in the federal medical assistance percentage for Medicaid, noting that it could serve as a way to increase federal control over health care, which the White House opposes. Leavitt said, "I don't think that Medicare and Medicaid were intended as jobs programs," adding, "They were intended to help those with serious economic disadvantages" (Andrews/Herszenhorn, New York Times, 1/17).
A House Republican aide said, "Increasing Medicaid payments is a great way to expand entitlement spending but would do little or nothing to actually improve the economy for working Americans," adding, "It is just a simple cash transfer to states, with no connection to the areas of greatest need or any requirements that the money actually be spent in ways that help improve the economy" (CQ HealthBeat, 1/16).
However, according to CongressDaily, the money for Medicaid, along with increased funding for food stamps, is "certain to be included" in the economic stimulus package (Cohn, CongressDaily, 1/17). A proposed increase "would surely meet with Republican objections, although not necessarily fatal ones," CQ HealthBeat reports.
Republican aides on Wednesday said that the presence of the federal medical assistance percentage increases would not necessarily indicate that the White House will veto the package as long as they were part of an economic stimulus package that included tax cuts, according to CQ HealthBeat (CQ HealthBeat, 1/16). House leadership plans to meet on Tuesday with President Bush to discuss ideas for the stimulus package (Geewax, Atlanta Journal-Constitution, 1/17).