"The biggest culprit in Texas' growing debate over escalating Medicaid costs" is "[a] mathematical formula that calculates how much the federal government pays and what's left over for the state," Kaiser Health News, in collaboration with The Texas Tribune, reports. "Already facing a record budget shortfall, Texas' Federal Medical Assistance Percentage (FMAP) will drop more than 2 percentage points in late 2011, equivalent to a $1.2 billion hit." Federal stimulus funds had already been artificially boosting the federal government's share of states' Medicaid costs, meaning it picked up 70 percent of Texas's Medicaid costs rather than the usual 60 percent under Texas' FMAP match. But the stimulus funds will "dry up in the spring, another blow to cash-strapped state Medicaid programs in Texas and across the nation" (Ramshaw and Galewitz, 12/7).
PBS NewsHour: "For 45 years, the states and federal government's Medicaid program has provided health care to low income children, pregnant women, seniors and disabled adults," but "In Texas, where Republicans were empowered with major election victories last month, some lawmakers are talking about getting out of the federal Medicaid business altogether." But "two Texas state agencies reported that if the state dropped Medicaid it would create a 'no-win dilemma' because that would mean a loss of about $15 billion in federal money sent from Washington to support the program," causing as many as 2.6 million residents to become uninsured. A handful of other states are also considering opting-out, while others have already chosen to cut back on benefits such as dental coverage (Bowser, 12/6).
Related, earlier KHN story: States' Woes Spur Medicaid Drop-Out Talk (Ramshaw and Werber Serafini, 11/12)
Realted, earlier summary of news coverage: Texas Gov. Perry Backs Away From Medicaid Dropout Threat (12/4)