When the Legislature took its final action on the FY 2011 Health and Human Services budget in March, a major assumption was built into that bill. It was expected that Congress would pass legislation extending the enhanced federal matching funds for Medicaid so that the additional money would run throughout the whole year. Things have changed since adjournment and the prospect of a Medicaid shortfall in the new year has increased dramatically.
The ability to balance the state’s FY 2011 budget hinged on the federal government providing more Medicaid funding. The Democrats’ Medicaid budget reduced the General Fund appropriation from $606 million in FY 10 to just $394 million in FY 11. Believing they would receive a full year of an additional 6.2 percent of federal Medicaid funds from Washington enabled legislative Democrats’ to divert money to other departments. Instead of putting $119 million towards Medicaid, it was spent on numerous other items throughout the budget. Kind of a “rob Peter to pay Paul” scheme.
Extension of the federal Medicaid enhanced match was considered for inclusion in the federal health care reform bill, but was not added due to the cost – $24 billion. After health care reform passed, it was assumed that this could be attached to the emergency appropriation bill to fund military operations in Iraq and Afghanistan. But Republicans, who are needed to pass that bill, refused to vote for any domestic spending included in the bill.
Next, congressional leadership decided to add it to this year’s stimulus bill. Instead of being honest with the American public on what the money was to do, they claimed it was a “jobs” provision. The money would go to save public employee jobs. That didn’t work either, as Blue Dog Democrats in the House refused to vote for the bill until the money was stripped out.
Once the House voted before Memorial Day on the bill, the experts in Washington believed the Senate would add the funding to the bill and jam it down the House members’ throats. That has yet to happen since Senate Republicans refuse to go along with the plan. Early last week, Senate leadership offered up a sliding scale where states would instead get 5.3 percent bump for January through March and then 3.2 percent bump from April to June. That idea would have lowered Iowa’s allotment from $119 million to $80 million. That didn’t work either.
Then last Wednesday night, Senator Reid announced that the plan had been changed to 3.2 percent for January through March, and 2.1 percent for April, May, and June. Estimates on Iowa’s share under this plan are not available yet, but it is likely to be significantly less than the previous estimate of $80 million. He also said he didn’t know if he had the 60 votes needed to pass the bill and that he had no backup plan. And, he had no assurance that the House would accept the Senate’s new plan. So, Iowa’s Medicaid budget for FY 2011 looks like it might be short at the start of the new fiscal year, July 1.
(From Representative Dwayne Alons Capitol Comments June 30, 2010)
