States are worrying that enhanced federal payments to
help cover Medicaid expenses during the recession will soon end after the House
opted not to include an extension of the funds in its recent jobs bill. 
States are lobbying the Senate to put back a provision back into the jobs bill
that provided funds for enhanced federal Medicaid payments that would last
through the end of the year, CQ reports. "'States are still in fiscal
peril,' Scott Pattison, executive director of National Association of State
Budget Officers (NASBO), said during a conference call June 3. He said
governors face a 'cliff' when the extra $87 billion provided for Medicaid in
the 2009 stimulus package runs out Dec. 31." The governors association is
asking for lawmakers to restore the enhanced funding — at a cost of $23 billion
— through next June, after it was stripped out of a jobs bill last week.
"Under the health care overhaul law, states can no longer increase
premiums or otherwise change eligibility criteria for Medicaid. That means
their options for cutting costs are limited to things like reducing provider
reimbursements, increasing co-payments or dropping coverage for optical and
dental services".  Meanwhile, news reports indicate that states also
are bracing for the budgetary impact if Congress doesn't extend this federal
Medicaid assistance. More