With a depressed economy and already strained state budgets, a House panel on Tuesday considered extending emergency federal assistance to state Medicaid programs.
The House Energy and Commerce Committee's Subcommittee on Health held a hearing to examine the effects of the economic downturn on Medicaid programs. On the table for consideration is H.R. 5268, legislation to provide a temporary increase in the Medicaid federal medical assistance percentage (FMAP). The bill was introduced last February by Rep. Frank Pallone (D-N.J.) and referred to the House Committee on Energy and Commerce for consideration.
States are in trouble, with state revenues slowing each quarter, according to Robert Tannenwald, president of the National Tax Association and vice president of the Federal Reserve Bank of Boston.
"The nationwide turmoil in housing markets, soaring energy prices and falling employment have combined to hit sales tax collections especially hard," he said.
Heather Howard, commissioner of the New Jersey Department of Health and Senior Services, affirmed the distress. Some states have already made cuts to public health programs, with threats of increased cuts looming. In New Jersey, seven hospitals have closed in the past 18 months and half of those that remain open are operating in the red, she said.
Howard said unless Congress intervenes with temporary increases in FMAP, states may be forced to reduce healthcare services and eligibility for the most vulnerable.
Robert Helms, a resident scholar at the American Enterprise Institute in Washington, D.C., said he doesn't recommend a temporary reprieve. That will make "an already flawed policy even worse," he said.
Instead, Helms recommended fixed grants to states based on their economic performance and populations of poor and disabled.
A recent study by the Center on Budget and Policy Priorities found at least 29 states are facing an estimated $48 billion in combined shortfalls in their budgets for fiscal year 2009. In addition, 20 states have already reduced services to their residents, including some of their most vulnerable populations, according to the center.
Do you have stories about how hard your state health programs are being hit? Send them to Senior Editor Diana Manos at diana.manos@medtechpublishing.com.