U.S. government sends home healthcare money to states

WASHINGTON Tue Feb 22, 2011 3:42pm EST

WASHINGTON Feb 22 (Reuters) - States stand to gain billions of dollars as provisions in the U.S. healthcare plan to move Medicaid patients out of institutions come on-line, with 13 states awarded $45 million in grants on Tuesday, the Health and Human Services Agency said.

"Our country recognized in the Americans with Disabilities Act that everyone who can live at home or community-based settings should be allowed to do so," Health Secretary Kathleen Sebelius said in a statement announcing the grants.

Medicaid is the health program for the poor that was greatly expanded under the healthcare reform plan President Barack Obama signed into law last March.

In extending Medicaid's reach, the U.S. government is also increasing reimbursements sent to states and awarding new grants for the program.

Still, most states are worried they will not have enough money to administer many of the parts of the healthcare plan and are requesting waivers for implementing components they cannot afford under their stretched budgets.

Many are also trying to block the law in federal courts, saying it usurps states' and individuals' rights.

Florida, which is leading a multi-state legal challenge to the law, was one of the 13 states awarded a grant on Tuesday to move the elderly, people with disabilities, and Medicaid recipients with mental illnesses from nursing homes and other institutions back into their homes or communities.

The federal government said the grants will likely help 13,000 people.

Massachusetts received the largest grant of $13.5 million, followed by Minnesota, which was awarded $13.4 million in the grants.

Starting in October, states will also receive a 6 percent increase in the federal reimbursements for providing nurses and other home-based support to people on Medicaid.

Through 2014, states could see a total of $3.7 billion in new funds to pay for attendants who help individuals with daily activities such as bathing, and also to help move people by paying for utility deposits, rent or household supplies.

The federal government is currently seeking comments on how to implement this part of the law, but expects states to establish councils with a majority membership of people with disabilities and elderly individuals to design the programs.

(Reporting by Lisa Lambert; Editing by Andrew Hay)

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