State Medicaid funding reduction looms; nursing home advocates urge caution on Medicaid reforms

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Gov. Mark Parkinson
Gov. Mark Parkinson

The federal government on Friday will scale back the amount of Medicaid money it sends to states as one phase of a temporary increase to the federal medical assistance percentage (FMAP) comes to an end.

As part of the 2009 stimulus package, the federal government issued a temporary 6.2% increase in its contribution to state Medicaid programs, which was set to expire Dec. 31, 2010. As the economic crisis continued, however, Congress voted to extend the increase through the first six months of 2011, but at a lower and gradually diminishing rate. Between Jan. 1 and Mar. 31, the increase has been 3.2%. Starting Friday, the increase will drop to 1.2% before fully expiring on July 1. (McKnight's, 8/5/10)

Faced with this looming reduction in funding, and still-unresolved budget crises, many states, as well as members of Congress, have been considering Medicaid cuts or reforms that would turn Medicaid funding into block grants. On Monday, American Health Care Association President and CEO Gov. Mark Parkinson fired back against these proposals, arguing that allowing such reforms “could jeopardize the care of many frail seniors and individuals with disabilities.”

“While we understand that many states are facing looming budget challenges, these proposals fail to think of the long-term costs,” according to Parkinson. “Cutting Medicaid services, including long-term care, translates into higher hospitalization rates and other costs on the health care system. Meanwhile, providing states with a fixed dollar without accounting for the growing number of seniors that will require long term care services will prove to be non-sustainable and fail to solve our budget crisis.”