PROVIDENCE – Gov. Donald L. Carcieri is “very concerned” about the U.S. Senate’s failure to approve extra Medicaid assistance that state officials are depending on to balance next year’s budget, his spokeswoman said Friday afternoon.
“We’re watching it very closely,” Amy Kempe, Carcieri’s spokeswoman, told Providence Business News.
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Rhode Island’s $7.8 billion budget for the fiscal year that starts July 1 was balanced based on an expected $108 million in extra Medicaid reimbursements from the federal government.
On Thursday, the Senate failed to approve the Medicaid money for the third time in the past two weeks when Republicans and one Democrat blocked the bill, citing concerns about its $16 billion cost in the face of large federal deficits.
Thirty-one states balanced their budgets for the 2011 fiscal year using a combined $11.6 billion in expected payments from Medicaid, which provides health insurance for low-income Americans, according to data compiled by Bloomberg.
Rhode Island’s two Democratic senators, Jack Reed and Sheldon Whitehouse, support the extra Medicaid payments. Kempe said she did not know whether Carcieri has contacted any of his fellow Republicans in the Senate to ask them to support the funding.
“I’m not aware that he has,” Kempe said. “For states that are facing continual budget strains, this isn’t a partisan issue – this is a matter of revenue,” she added.
Members of the Carcieri administration remain hopeful that the money will eventually get approved considering more than half the states are depending on it, Kempe said. “There is a tremendous amount of pressure on Congress to move on this because it impacts so many state budgets,” she said.
Carcieri allowed the 2010-11 budget to become law without his signature on June 14. At the time, he expressed concern that “having this gaping hole in the budget [because of the Medicaid payments] is ill-advised.” But Kempe said the governor would not point fingers now.
“It’s in the budget and now we have to address it,” she said.
The cost of Medicaid is shared by the federal and state governments based on a calculation set by Congress through the Federal Medical Assistance Percentage, or FMAP.
The economic stimulus law enacted last year increased the share of Rhode Island’s Medicaid spending covered by the federal government by about 10 percentage points, from 52.6 percent to 61.5 percent last year; 52.6 percent to 63.9 percent in fiscal 2010, which ends June 30; and 52.9 percent to 64.2 percent in the first half of fiscal 2011, which starts July 1.
Under the stimulus law, the higher Medicaid match will expire on Dec. 31, halfway through the state’s fiscal year. The state budget assumes it will be extended until the end of the fiscal year on June 30, 2011, providing a total of $190.7 million over the full 12 months.
If the Medicaid match does expire on Dec. 31 as scheduled, the state would have to come up with roughly $108 million out of its own tax revenue, which is expected to total about $3 billion next year.
Lawmakers included a provision allowing the governor to institute across-the-board cuts elsewhere in the budget to make up the difference if that happens. Still, that amount of savings would be “extremely challenging to come up with,” Kempe said.
