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Regulation and Compliance > State Regulation

PPACA: Republicans Ask for Medicaid Funding Details

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Rep. Fred Upton, chairman of the House Energy and Commerce Committee, is asking for more information about how the Obama administration intends to handle future Medicaid funding provisions.

Upton, R-Mich., has sent a letter asking for more Medicaid funding details to U.S. Health and human Services Secretary Kathleen Sebelius.

Sen. Orrin Hatch, the highest ranking Republican on the Senate Finance Committee, also has signed the letter.

Hatch worked with the late Sen. Edward Kennedy, D-Mass., to create the Children’s Health Insurance Program (CHIP).

CHIP provides health coverage for moderate-income children. Medicaid provides health coverage for people who are poor.

The Patient Protection and Affordable Care Act of 2010 (PPACA) ties state Medicaid funding to state efforts to open their Medicaid programs to adults with incomes up to 133% of the federal poverty level.

When the U.S. Supreme Court ruled recently on challenges to the constitutionality of PPACA, it held that Congress had the authority to additional Medicaid funding to states’ actions on Medicaid but did not have the authority to reduce existing Medicaid funding to get states to cooperate.

The Obama administration has said in its budget proposal for fiscal year 2013, which starts Oct. 1, that it wants to use a single blended match rate for Medicaid and CHIP and said that decision would save $18 billion over 10 years.

The administration included a similar proposal in 2011 deficit proposal, Upton and Hatch write in their letter.

“A blended federal Medicaid rate that reduces Medicaid spending over time is a policy that would reduce federal funding to states through a reduced federal match, notably a reduction to the enhanced match to states for the newly eligible Medicaid beneficiaries,” the lawmakers say. “This policy could have a dramatic effect on how much a Medicaid expansion could cost state governments after 2014.”

PPACA calls for the states to spend an extra $118 billion on Medicaid expansion efforts over 10 years. The federal government has said it will cover 100% of that cost until 2020, then provide a 90% federal match to cover the additional costs “in perpetuity,” the lawmakers say.

Given the size of the federal budget deficit, governors are right to be concerned about whether the federal government can really make good on that commitment over the long term, the lawmakers say.

Upton and Hatch say that, in response to these concerns, they would like the Obama administration to provide them with “all legislative and policy specifications” on how the president’s Medicaid blended rate proposal would work on a state-by-state basis.


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