Medicaid Funding Limbo

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It’s no secret that these are lean times — and nowhere is that more evident than in state legislatures, many of which are currently writing their annual budgets. Due to lower tax revenues as a result of the current recession, many states are facing a record cash shortfall. And since states spend an average of 20% of their budgets on Medicaid, funding for this program has become endangered.

Medicaid is a joint program between the states and the federal government to provide health care for low-income people; it is administered by each state. Rules for eligibility vary by state, but generally children and their parents, if they fall below a certain income level, receive free or heavily discounted health care under the program. Due to the job losses of the recession, enrollment in Medicaid has spiked across the country, just as states are finding it extremely difficult to pay for the program. For this reason, emergency spending for Medicaid, provided as aid to the states, has been included in various bills brought before Congress, but each one of these bills has been rejected one way or another. Most recently, last Thursday the US Senate rejected a motion (three votes short of the 60 needed) to proceed with a bill that included $24 billion for Medicaid, an amount that would extend emergency levels of Medicaid spending by six months, to June 2011, according to a Reuters article.

While the proposed spending in Medicaid relief proposals would kick in six months from now, many states need to make overall budget decisions now. According to an article at The, 14 states with a fiscal year that starts next month are waiting for Congress to pass a Medicaid funding extension before finalizing their budgets. As many as 30 states are counting on an extension for their budgets next year. The effects of Congress’s inaction are already being felt in some states. According to an article in Oregon’s Statesman Journal, the governor of that state ordered spending cuts last week that will result in elimination of programs that provide in-home care to older and disabled people as well as home delivery of meals under Medicaid. According to an article in Alabama’s Huntsville Times, a few of the 30 states counting on a funding extension — including Alaska, Florida, Idaho, Louisiana, Maryland, Oklahoma, South Carolina, and Tennessee — have a backup plan for their Medicaid programs in case Congress does not pass the extra funding, but most states (including Alabama) do not. It is likely that in nearly every state, failure of Congress to extend Medicaid funding would mean that numerous programs — not just Medicaid — see their funding reduced.

Do you rely on Medicaid for your medical care? If so, have you noticed any changes in the program in the last couple of years, as state revenues have dropped? Have any such changes affected your diabetes care? Should Congress pass the proposed Medicaid funding extension? Contact your representatives, if you like, and leave a comment below!

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