States Worry About Cost of Expanding Medicaid as Tax Revenue Falls

A proposed expansion of Medicaid has prompted concerns about whether states will be able to afford the associated costs and handle an influx of new beneficiaries, as well as whether the current physician supply will be sufficient, USA Today reports (Wolf, USA Today, 10/18).

The Senate Finance Committee's health reform bill would grant Medicaid eligibility to anyone with an income of up to 133% of the federal poverty level. The federal government would pick up between 77% and 95% of the cost of the expansion, with states contributing the difference -- about $33 billion over 10 years.

Under a deal reached between Senate Finance Committee Chair Max Baucus (D-Mont.) and Senate Majority Leader Harry Reid (D-Nev.), the federal government would pick up 100% of the cost of the expansion in Michigan, Nevada, Oregon and Rhode Island for the first five years (California Healthline, 10/9).

Various governors have questioned whether their states can afford their share of the expansion (USA Today, 10/18).

At the same time, more state governors are meeting with residents to convince them that the budgetary issues states face are becoming residents' problems, too, the Wall Street Journal reports.

It is a "tough message" for governors to deliver, particularly after "decades of expanding state services," but "the recession is giving them little choice and forcing them to try to change voters' expectations about what government can provide," according to the Journal.