Call it the Nebraska affect.
After the Cornhusker State landed a pot of previously unavailable money in exchange for its “Yes” vote on the now fumbled Senate healthcare reform bill, the Obama Administration is expected to announce on Friday a proposal that would add another $25 billion worth of funds to states to use for Medicaid, according to the AP.
The Medicaid windfall is expected to mirror the economic stimulus program that took effect last year, where non-recurring Medicare funds were divvied up among states with the highest unemployment rates. Under the new initiative, the Feds will take on a higher stake of state Medicaid funds for a period of six months (or until July, as proposed) with every state in the U.S. getting an additional 6.2 percent of its current Medicaid budget paid for by federal dollars. Again, those states with higher unemployment are slated to get more.
The proposal is the centerpiece of President Obama’s 2011 budget. It is unclear whether the measure will be wrapped up in the Administration’s $174 billion “Jobs Bill” that Obama unveiled at his State of the Union address last week, or if it would be presented to Congress as part of a special line item. Regardless, if the Medicaid measure passes both houses of Congress, the money would not be made available to states until next year. Obama already has a bit of a head start on getting the measure passed since the House already passed the Medicare extension in a previous session.
Although his budget is highly unlikely to be passed without some significant cuts by Congress, the Obama Administration is stemming the tide of requests from state and local leaders with large populations of unemployed workers who are facing the end of federally-subsidized COBRA health insurance plans. Coupled with a growing pool of retired and elderly citizens who are living on fixed incomes during the nation’s second worst economic recession, the coming Senatorial elections this November and Congress is expected to rubber stamp Obama’s proposed boost in Medicare spending. Aside from the usual partisan bickering about budgets and deficits, we can also expect some debate about the disparity of Medicare funds available to large states like California and Texas, both of which also have a large unemployed population.
Reuters is reporting today that about $645 billion total of the Obama budget is specifically earmarked as money for various state economic and emergency funding programs. One half of that money is dedicated to various reforms for health insurance companies designed to extend affordable health insurance to to the unemployed and economically disadvantaged.