Unlike Vermont, Many States 'Frantic' For Medicaid Funds

06/09/10 5:49PM By Bob Kinzel
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AP File Photo/Toby Talbot

(Host) Vermont's two U.S. senators are supporting a bill that would pump billions of dollars into state Medicaid budgets.

Many states are relying on the money for their general operating expenses. But, as VPR's Bob Kinzel reports, that's not the case in Vermont.

(Kinzel) The funds are considered to be an extension of last year's federal stimulus package but when the U.S. House looked at the $24 billion price tag for the plan, it decided to remove the provision from a new jobs bill.

Several months ago, most governors assumed that the legislation would pass and they used the new money to help balance their state budgets.

Governor Jim Douglas says Vermont deliberately chose a different approach:

(Douglas) "About 30 states in their legislatively approved budgets assume some additional federal Medicaid money for base operations. We did not - I think that's one area where we were very fiscally responsible this year."

(Kinzel) Vermont is expected to receive $62 million from the new bill.  Douglas says most of the money has been allocated for a variety of one time projects:

(Douglas) "We do assume 5 or 6 million to replenish a reserve in the Education Fund. But otherwise it's one-time expenditures for technology, expenditures in state government for the new State Hospital for a secure residential facility, capital expenditures that are one time and could be deferred if we don't get those dollars."

(Kinzel) The U.S. Senate is expected to consider the new jobs bill, with the additional Medicaid money, in the near future.

Douglas says many governors are urging their congressional delegations to support the expanded bill, because if it doesn't pass, a lot of states will face enormous financial problems:

(Douglas) "I've talked with colleagues who are - I don't think it's an exaggeration to say - frantic, because their budgets are so heavily dependent on these additional Medicaid resources that they're in deep trouble fiscally if they don't get it. And that's governors of both parties."

(Kinzel) If Congress doesn't support the plan to include the special Medicaid money in the new jobs bill, Senators Patrick Leahy and Bernie Sanders say they'll introduce a separate stand alone bill to extend the Medicaid funds for another 6 months.

For VPR News, I'm Bob Kinzel in Montpelier.

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