WASHINGTON – New York Gov. David A. Paterson, representing the National Governors Association, last week urged Congress to include a 5-percent increase in federal Medicaid matching funds for two years as part of a new economic stimulus package to provide “direct and immediate fiscal relief” to the states.
At a House Ways and Means Committee hearing, Paterson testified that a temporary Medicaid funding boost should be provided to “states hardest-hit by the current economic crisis.”
In a letter to the committee days earlier, the Governors Association had noted that enchancing the Federal Medical Assistance Percentage “is a particularly effective countercyclical tool because it immediately allows governors to eliminate planned budget cuts required to meet balanced-budget requirements and continue services for those with the greatest need.”
Paterson, whose own state expects a $47 billion state budget shortfall over the next three years, also urged the Ways and Means Committee to block a Medicaid regulation that would cut billions of dollars in funding for outpatient departments and clinics.
But according to a CQ HealthBeat report, not all governors agree with this approach.
South Carolina Gov. Mark Sanford, a Republican, testified that a $150 billion economic stimulus package would “dangerously encourage even more growth in governmental programs like Medicaid, which in state budgets across the nation already grew 9.5 percent per year over the last decade – certainly unsustainable in our state.”
“There may be better routes to recovery than a blanket bailout,” he added, “including offering states like mine more in the way of flexibility and freedom from federal mandates instead of a bag of money with strings attached.”
Rhode Island Gov. Donald L. Carcieri already has taken an approach more closely resembling Sanford’s, seeking a waiver that would allow the state to implement major reforms in how it spends its Medicaid funds in exchange for agreeing to a fixed amount of money.
