Loss of Federal Funds Imperils State Budget
June 4, 2010
Last week, the U.S. House of Representatives approved a jobs bill after stripping out a six-month extension of federal assistance to states for health care costs, known as the FMAP extension. This federal fiscal relief was part of the American Recovery and Reinvestment Act of 2009 and was intended to help states avoid cuts to health and human services and preserve public and private sector jobs.
The enhanced FMAP, which funds the federal share of Medicaid costs, is set to expire at the end of December. Without an extension, Pennsylvania will face an additional $850 million gap in the 2010-11 state budget - on top of a current fiscal year shortfall of $1.2 billion.
Without these funds, the Governor has said Pennsylvania will:
- Cut supplemental payments to hospitals that care for Medicaid and uninsured people by $93 million
- Cut county child welfare by 25% and cut MH/MR services for a total of $350 million
- Cut all state funded substance abuse and homeless services and other services to poor families by $91 million
- Cut Medicaid payments to doctors and other providers by $86 million
- Cut home and community based waiver services by 10%
According to the Congressional Budget Office, temporary FMAP assistance, similar to unemployment insurance benefits, is one of the most effective measures to create jobs and increase demand in the economy. Without it, Pennsylvania could have as many as 25,000 layoffs, which would set back our fragile economic recovery.
The bill now goes to the Senate. As the House and Senate negotiate a final bill, it is critical that the six-month FMAP extension is restored. You can help by sending a strong message to your member of Congress that the FMAP extension must be in the final bill.
Take action with the Better Choices for Pennsylvania coalition.
