February 19, 2010 / 8:37 PM / 10 years ago

States get extra Medicaid aid but two want more

NEW YORK (Reuters) - U.S. states will get an extra $4.3 billion to pay for drugs for elderly or disabled people covered by Medicaid and Medicare, but at least two of the states with the biggest health plans said they need more cash.

“This relief will help states continue to provide critical health care services to the nearly 60 million beneficiaries who depend upon it,” U.S. Health and Human Services Secretary Kathleen Sebelius said in a statement on Thursday evening.

Medicaid is the joint state-federal health plan for the poor, disabled and elderly. Medicare covers people who are at least 65 years old or have long-term disabilities and the federal government pays for it.

Both New York Democratic Governor David Paterson and California Republican Governor Arnold Schwarzenegger applauded the federal assistance Sebelius announced. New York’s share is $400 million; California will get over $675 million.

But like many states whose tax revenues have crumpled during the recession, New York’s deficit has soared and now is expected to top $8 billion, while California must shut a nearly $20 billion budget gap — and Schwarzenegger expects the federal government to chip in nearly $7 billion.

To underscore the cash crunch in the most populous state, Schwarzenegger last month traveled to Washington, D.C., and met with Sebelius, a former Democratic governor of Kansas.

On Thursday the Hollywood icon turned politician also thanked the White House, a sharp contrast with the criticism he recently heaped on its healthcare overhaul plans.

In a statement Schwarzenegger said that “our bipartisan efforts for a more fair and equitable relationship with the federal government are paying off.”

“These funds are important, and while we still have more work to do, I appreciate the commitment of the Obama Administration in responding to our requests for these much-needed funds that are owed to our state.”

New York’s governor also welcomed the extra dollars but added that, “Given the serious nature of the fiscal crisis that states across the country continue to face, further action is still needed.”

He urged Congress to include President Barack Obama’s proposal to give states an extra two quarters of increased reimbursements for Medicaid in any job-growing legislation.

The number of New Yorkers whose health care is covered by Medicaid hit a record of 4.2 million in October 2009, 13 percent above the previous high set in August 2005.

On Friday, Paterson, whose short-term savings plans include possibly delaying income tax refunds owed to New Yorkers by several weeks, released a list of parks to be closed.

Jones Beach State Park, one of Nassau County’s most crowded parks on Long Island, will shut one swimming pool and cancel fireworks on the July 4th U.S. Independence Day holiday.

Reporting by Joan Gralla in New York and Jim Christie in San Francisco; Editing by Kenneth Barry

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