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October 5th, 2009 11:36 am
Health Care Reform Threatens to Crush Already Struggling State Budgets

Last week, CFIF ran a commentary piece discussing the budget-busting effects that an expansion of Medicaid, as called for in the health care reform bills making their way through Congress, will have on state budgets.

With many state budgets deep in the red and governors scrambling to find more places to cut due to the economic downturn, we warned:

The principal (but far from only) problem for the states [with health care reform] is forced expansion of Medicaid, a shared expense with the federal government, but already coming apart at the seams in many states, which must, on average, pay about 43 percent of Medicaid costs.”

Shailagh Murray of The Washington Post has a piece today with the sub-title “Governors Fear For Their Budgets” that addresses the issue, and which reads in part:

Whether Medicaid can absorb a huge influx of beneficiaries is a matter of grave concern to many governors, who have cut low-income health benefits — along with school funding, prison construction, state jobs and just about everything else — to cope with the most severe economic downturn in decades.”

The issue is getting some attention in Congress, particularly by Majority Leader Harry Reid who cut a sweetheart deal with Senate Finance Committee Chairman Max Baucus to, as Murray notes, “ensure that the federal government would pay the full cost of expanding Medicaid in Reid’s state, Nevada.” 

Some governors, notably Rick Perry (R-TX), Phil Bredesen (D-TN) and Mitch Daniels (R-IN), are already speaking out on this issue.  Is yours?

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