September 16, 2009 / 7:05 PM / 10 years ago

Healthcare plan could help states with Medicaid

WASHINGTON (Reuters) - States may receive more money from the U.S. government for the Medicaid program for the poor under the Senate Finance Committee chairman’s healthcare reform proposal released on Wednesday.

The $856 billion legislation, which may form the basis of compromise in the U.S. Congress on giving all Americans health coverage, would “increase federal Medicaid funding for states that cover recommended preventive services and immunizations at no extra cost,” according to a summary from Senator Max Baucus, a Democrat from Montana.

States pay for Medicaid and are reimbursed by the federal government.

The bill would also make those with incomes under 133 percent of the federal poverty level, equal to an income of $30,000 a year for a family of four, eligible for Medicaid coverage.

Some states have worried that would increase the number of Medicaid enrollees and hike up costs. But the U.S. government “would provide additional funding to states for services for newly eligible Medicaid beneficiaries,” according to the summary.

At the same time, states would be required to provide poor children with services in addition to those that come with Medicaid, but costs would be shared between the states and U.S. government as they are currently under the Children’s Health Insurance Program.

A key component of the plan — exchanges for enrolling in health insurance and finding public benefits — would be carried out at the state level. State-based Web “portals” would explain healthcare options to individuals based on their postal zip codes.

Since the U.S. Congress returned to work this month, a bipartisan group of legislators has been hammering out a plan for reforming healthcare. The group has stayed in contact with states about potential cost increases or “unfunded mandates,” when the federal government requires states to carry out programs but does not provide enough funding.

Some states are considering amending their constitutions to opt out of nation-wide healthcare.

Late Tuesday night, the Senate Finance Committee held a conference call with about 10 governors.

While a key Republican governor, Haley Barbour of Mississippi, was encouraged by the call, he said he was still worried about other provisions in the committee’s proposal.

“It is clear the Senators are trying to reduce or eliminate the unfunded mandate, and I appreciate their effort,” said Barbour, who chairs the Republican Governors Association, in a statement. “Nevertheless, Mississippi’s small businesses and our Medicare beneficiaries have too much at risk.”

Medicare, the healthcare program for senior citizens, is jointly administered by states and the federal government.

Speaking to reporters after the call, Baucus said the average increased costs to states under the proposed legislation would be 0.89 percent. Because the bill includes some costs savings, some states will come out ahead, he said.

“The additional burden on states is negligible,” he said.

Senator Kent Conrad, a Democrat from North Dakota, said the governors were satisfied with much of the legislation, but were concerned about insurance premiums under the plan.

“If there is one thing we have learned loud and clear all across our states is the concern with increasing cost of premiums,” he said.

Reporting by Lisa Lambert and Donna Smith; Editing by Andrea Ricci

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