Congress isn't even considering a bill to extend Medicaid funding

Pennsylvania Gov. Ed Rendell's state budget included $850 million in funds from the federal government that may not materialize

If you were already worried about whether the federal government would really come through with the $850 million in Medicaid funding that Pennsylvania has already factored into its budget, prepare to get downright scared: At this point, there isn't even a bill being considered by Congress to provide the increased funding.

Rachael Morgan, who is the Senior Health Policy Specialist at the National Conference of State Legislatures, says federal lawmakers have repeatedly killed legislation that would have provided the increased funding -- known as FMAP -- and haven't offered an alternative way to make it happen.

“The last bill that [increased Medicaid funding] was in is not even up for a vote. The lawmakers will not be considering it anytime soon,” said Morgan. “It's just not as big a priority as other things right now. They're looking at financial reform and staring down the turnpike at the August recess. Frankly, I don't expect anything to happen before the end of the summer.”

The FMAP money was originally included in the massive healthcare overhaul passed by Congress, but it got removed before the final vote to get support from conservative Democrats. Then it was added to the jobless aid bill that failed two weeks ago. Lawmakers did not include the money in the latest version of unemployment relief, which could pass the U.S. Senate as early as tonight.

“It doesn't look good [for FMAP] right now,” says Morgan, who has been following the debate closely for nearly a year. “We haven't heard anything, except there are some comments that the states don't really need it. It's possible that it could come back in some form, but likely a greatly reduced amount. It's all a big unknown at this point”

If the federal government doesn't provide the funding, Gov. Rendell has estimated he'll have to cut $850 million from the state budget, which would mean laying off 20,000 employees. Pennsylvania is one of about thirty states that included the additional funding in their budgets.

Clearly, lawmakers in Pennsylvania can no longer pretend that the FMAP extension is likely. Instead, they need to start planning for the decisions that need to be made when the funds don't materialize. Rendell has said that he'll get discussions started if the Congress doesn't act by the end of July. Why wait? It's time to start coming up with some plans for doomsday.

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