The House passed the Medicaid funding measure in late May, as part of a larger package that included unemployment benefits and a fee fix. But the Senate twice failed to pass the package, and on Friday it pulled out the fee fix provision and passed it separately, leaving the rest of the package behind.
About 30 states, some with fiscal years beginning July 1, have been counting on the funds, called the enhanced Federal Medical Assistance Percentage, which are due to expire on Dec. 31. The rejected provision would extend the enhanced FMAP funds for six months until June 30, 2011.
Senators have become increasingly anxious that extra spending is increasing the federal deficit, but states have seen their Medicaid populations swell at a time when their income has fallen precipitously.
Michigan, for example, now has 1.8 million on its Medicaid rolls and providers in the state are already are taking an 8 percent cut in Medicaid reimbursements. Without $514 million expected under the failed bill, the state would likely extend the cut into fiscal 2011 and could reduce it even further.
Read Crain’s Detroit Business’ report on Medicaid.
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