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February 24, 2010

Riley, other governors, ask Congress to extend stimulus funds six months to shore up state Medicaid programs

Source:  http://blog.al.com/spotnews/2010/02/riley_other_governors_ask_cong.html

Gov. Bob Riley has joined 46 other governors in asking Congress to extend by another six months the federal economic stimulus funds to shore up state Medicaid programs.

"I think it is probably the easiest way the president can give states some options," Riley said.

The extension would bring an additional $163 million to Alabama's program in the first half of 2011 and prevent substantial cuts, according to Alabama's Medicaid commissioner, Carol Steckel.

The American Recovery and Reinvestment Act, known as the stimulus bill, that Congress passed last year will send a total of $850 million to Alabama for its Medicaid program over 27 months, ending in January.

Governors say the money saved jobs and allowed states to avoid reducing health services for their states' neediest residents, but more is needed.

"Unfortunately, the length and depth of the recession means states and territories will continue to face significant budget shortfalls long after the (Medicaid) provisions expire at the end of this calendar year," the Democratic and Republican governors wrote to House and Senate leaders on Monday.

Riley's position puts him at odds with the state's congressional delegation, most of whom voted against the original stimulus legislation and a subsequent health care bill that included similar provisions extending federal aid for state Medicaid programs.

Enrollment in Alabama's Medicaid program has jumped by about 100,000 people since 2007, the start of the economic downturn, Steckel told Alabama lawmakers in December. The total $5.3 billion state and federal program serves nearly 1 million people, she said, and she has recommended cuts in services to make up for funding shortfalls.

"This temporary assistance has been and will continue to be essential and necessary, particularly at a time when the state Medicaid programs are further being called upon to assist those individuals who have lost their jobs during the recession and the economic downturn," Steckel said.

But even with the extension, there still may be almost $80 million in cuts to optional programs and services, such as non-institutional hospice care, home health visits for adults and renal dialysis for adults, she said.

Before the federal stimulus law passed, Alabama was responsible for 32 percent of total Medicaid spending in the state, and the federal government picked up 68 percent of the tab. The stimulus increased the federal share to 77.6 percent and dropped the state's portion to 22.4 percent, a split that would be extended through June 2011 with the governors' proposal.

Under the health care reform plan President Barack Obama announced Monday, eligibility for Medicaid would be expanded to people in families earning 133 percent of the poverty level, about $29,000 a year for a family of four. All of the cost for the new enrollees would be picked up by the federal government for three years, and then the federal share would drop to 90 percent by 2020.