Senate Dems Eye Medicaid Cuts to Win Passage of Extenders Bill

My former colleague Mike Lillis, now at The Hill, reports that Senate Democrats are attempting to win over Maine Republican Sens. Olympia Snowe and Susan Collins on the tax extenders bill — also known as the jobs bill or H.R. 4213 — by cutting federal Medicaid funding for the states. As currently written, the bill gives states an additional $24.2 billion to provide health care coverage to low-income Americans as claims expand in the tough economy. The House version of the bill cut the extra Medicaid funding to appease deficit hawks. Many states already have the additional funding written into their budgets. Mike has the details on the cut:

Under an $87 billion provision of the 2009 economic stimulus bill, states received at least a 6.2 percent increase in the federal share of Medicaid funding, but that extra help expires at the end of 2010. Senate Democrats have pushed to extend that assistance through June of 2011 in order to help states shore up their budgets during a lean economy. But budget hawks opposed the proposal, which was estimated to cost nearly $24 billion. Instead, Democrats are now proposing to provide a 5.3 percent increase in federal Medicaid funds in the first quarter of 2011, and a 3.2 percent increase in the second quarter of 2011.

And here is CQ on the politics:

One key swing voter, [Collins], noted that she has long advocated for a phase-down approach to the Medicaid assistance that would avoid a cliff for state budgets. “I proposed it over a year ago, because I thought it was good policy,” she said.

[Snowe] said she has been meeting with Democrats about the bill and that they are looking at an approach that would shrink the cost of the Medicaid provision to $20 billion and use $4 billion in unspent stimulus money to cover some of that cost. Then, Snowe said, she has been urging Democrats to look at various spending items in the bill to see if they could be reduced. However, Snowe also wants to remove several of the revenue-raising provisions, which could increase the amount that is not paid for.

The delayed passage of the extenders legislation has led to cuts in Medicare reimbursement rates to doctors (though they should be retroactively reimbursed) and left hundreds of thousands of Americans without extended unemployment insurance benefits.