By John Reichard, CQ HealthBeat Editor
August 18, 2010 -- It appears the Obama administration has had its fill of states' bellyaching about the deficit impact of stimulus and other added funding—and then taking the money anyway.
A letter this week from Health and Human Services Secretary Kathleen Sebelius to state governors notes the availability of $16.1 billion in added Medicaid money under the education-Medicaid aid funding measure President Obama signed into law Aug. 6. She advised, however, that "these funds are only available for your state if you request them within 45 days of enactment, or by September 24, 2010."
"As a former governor and current partner with states in running Medicaid," Sebelius added, "I urge you to act."
Similarly, Education Secretary Arne Duncan says in a letter to governors that they must apply by September 9 for education funding under the law. "I encourage you to submit your application as soon as possible," Duncan said.
Higher levels of Medicaid funding were first made available in the 2009 economic stimulus law and were set to expire Dec. 31. The new state-aid package extends added funding through the middle of 2011, although at lower levels than in the original stimulus package.
South Carolina's Republican Gov. Mark Sanford drew press coverage in early 2009 for comments critical of stimulus funding, but the state is now receiving money for benefits for jobless residents, according to an Aug. 10 New York Times story. And Nevada Gov. Jim Gibbons, a Republican, and Tennessee Gov. Phil Bredesen, a Democrat, reportedly raised questions about taking stimulus money but then accepted it.
House Minority Leader John A. Boehner, R-Ohio, blasted the most recent round of state aid, as well as House Speaker Nancy Pelosi, D-Calif., for calling members back to Washington to vote on the package after their summer recess had begun.
Boehner spokesman Michael Steel said Pelosi's move was intended to placate teachers unions. In addition to the Medicaid funds, the aid package includes $10 billion in education funding.
"The American people don't want more 'stimulus' spending—particularly spending for labor unions attached to a job-killing tax increase," Steel said. "Democrats would be better off listening to their constituents—who are asking, 'Where are the jobs?'—rather than returning to Washington, D.C., to vote for more tax hikes and special-interest bailouts."
But governors will now have to weigh carefully what their constituents do and don't want, with extra Medicaid funds no longer flowing automatically to states without their requesting them.
The new law says states that request the added Medicaid money will receive a 3.2 percentage point increase in the federal share of Medicaid funding from January to March 2011, and a 1.2 percentage point increase from April to June 2011. Added increases are available for states with high unemployment rates.
"This new federal funding can stave off the deep cuts to Medicaid that many had feared, and sustain jobs in hospitals, health centers, and communities across the country," Sebelius said in the Aug. 16 letter to governors. She said the money also would support foster care programs. Sebelius also emphasized the economic impact of increased Medicaid funding, saying that the White House Council of Economic Advisers has estimated that those funds in the stimulus law "will protect or save more than 750,000 jobs."