Last week the Senate passed what is loosely termed a "jobs" bill that included a $16 billion appropriation to extend the ehanced Medicaid match created via the ARRA (Stimulus bill) to June 30, 2011. Without the extension of funding, states are facing a loss of the additional Medicaid matching dollars on December 31. Upon passage by the Senate, Speaker Nancy Pelosi called the House back into special session to take up the measure. The House was/is on recess through August.
The impetus behind a quick move on the part of the Speaker to reconvene the House membership is the $10 billion appropriation primarily for state education budgets. The funding is targeted, according to the Administration and House and Senate Democrats, at saving 130,000 public school teaching positions. At one point, Congress had priced the cost of saving these positions as $23 billion but that amount was unpalatable in the Senate, hence the re-pricing to $10 billion. The FMAP provision sits along side making the total price tag of the bill $26 billion.
In order for the bill to pass the Senate in its slimmed-down version, Senate Majority Leader Harry Reid was forced to offset the price tag with a combination of cost savings and tax hikes. Mr. Reid thus crafted the version to include cuts in food stamp funding and increases on certain multi-national companies that headquarter in the U.S. The resulting "budget neutrality" of the final Senate bill created just enough migration of Republicans, primarily opposed to the bill, to join Democrats in support.
Even in spite of a large margin of apparent Democrat votes in favor of the bill in the House, passage is not a locked-dead certainty. Oddly enough, the funding for FMAP continuation, even with its larger price tag, is not among the issues that could derail the bill. Below, I've provided a quick summary of issues that could cause the bill to stall in the House or alternatively, be re-crafted and thus, set for conference.
As important as continued FMAP enhancement is for the long-term care industry in the short-run, the real issue of importance is the need for reform of the disfunctional and ineffective Medicaid sytem. Even with passage of the current appropriation, the structual Medicaid deficits state to state continue to loom, just in this case, moved to June 30, 2011 rather than December 31, 2010. The probability of a reinvigorated economy growing sufficiently fast enough by early 2011 to change state budget fortunes positively is slim and none. What this means for providers is that come December, renewed lobbying efforts for additional extensions of money that the federal government truly does not have, will heat-up again. Sooner or later (likely sooner), the industry will need to re-position and realize that the current methodology for funding long-term care under Medicaid is simply unsustainable.