The New York Times reports that "The nation's governors, Democrats as well as Republicans, voiced deep concern Sunday about the shape of the health care plan emerging from Congress, fearing that Washington was about to hand them expensive new Medicaid obligations without money to pay for them. The role of the states in a restructured health care system dominated the summer meeting of the National Governors Association here this weekend — with bipartisan animosity voiced against the plan during a closed-door luncheon on Saturday and in a private meeting on Sunday with the health and human services secretary, Kathleen Sebelius." After the meeting, Sebelius said "there's a recognition that states don't have cash right now… i'’s difficult to send states the bill if they don't have the money."
Many governors support health care reform but "said their deep-seated fiscal troubles made it a terrible time to shift costs to the states... In the House bill, Medicaid would be expanded to cover all nonelderly people with incomes at or below 133 percent of the poverty level, or $29,300 for a family of four. The federal government would pay all the costs for those who were newly eligible... In a draft of the bill in the Senate Finance Committee, the federal government would pick up the extra costs for perhaps five years, but states would eventually have to pay their normal share. On average, the federal government pays 57 percent" (Sack and Pear, 7/19).
Fox News quotes Gov. Haley Barbour, R-Miss., at the meeting: "This huge expansion of Medicaid would be extremely expensive in my state. We anticipate that it would increase spending on Medicaid by 50 percent, and that's money we don't have. And other states don't have it either," Gomez, 7/19).
The Denver Post: "'Our only point was that a significant Medicaid expansion should not operate as an unfunded mandate for the states,' [Gov. Bill] Ritter [D-Colo.] said. 'There is broad support for health care reform, but it may depend on the details and finer points of what that includes.' Ritter said the federal stimulus funds had helped states but that work would be undone if Congress passed on new costs" (Bunch, 7/20).
Meanwhile, "Despite budgets ravaged by the recession, at least 13 states have invested millions of dollars this year to cover 250,000 more children with subsidized government health insurance," The New York Times reports in a separate story. "The expansions have come in the five months since Congress and President Obama used the reauthorization of the Children's Health Insurance Program to vastly increase its funding and encourage states to increase enrollment. Although the federal government covers the vast majority of the cost, states set their own eligibility levels and must decide whether to spend state money in order to draw even more from Washington. In addition to increasing income eligibility levels, three states are dropping requirements that legal immigrants wait five years before joining the program, a step newly permitted by the federal legislation. Others have extended coverage to pregnant women or streamlined enrollment and eligibility procedures."
"The federal legislation, which extended the program through 2013, provided $32.8 billion in new financing over that period, paid with an increase in tobacco taxes" and "allows states to provide coverage to children from families living at up to three times the poverty level." States that have expanded eligibility include Alabama, Colorado, Arkansas, Indiana, Iowa, Montana, Nebraska, North Dakota, Oklahoma, Oregon and West Virginia. Other states, however, including California, have "either deferred previously scheduled eligibility expansions or saw their legislatures defeat efforts to broaden coverage" (Sack, 7/18).