Kerry and others call for EXTENSION OF MEDICAID ASSISTANCE PROGRAM

KERRY, COLLEAGUES CALL FOR EXTENSION OF MEDICAID ASSISTANCE PROGRAM

Without an extension, Massachusetts will have to cut approximately $600 million from state budget



BOSTON – Senator John Kerry and 43 of his Senate colleagues today sent a letter to Senate Majority Leader Harry Reid urging him to extend federal assistance for state Medicaid programs for six months.



This relief, originally included in the American Recovery and Reinvestment Act, has helped to stabilize and stimulate state and local economies during the economic downturn by assisting states with growing Medicaid enrollment at a time when state revenues are declining.



The Recovery Act provided a 6.2 percent increase in federal assistance as well as additional federal funding for states with high unemployment. However, these increases in federal reimbursement expire on December 31, 2010, which occurs in the middle of fiscal year 2011 for most states including Massachusetts.



Similar to 16 other states, Governor Deval Patrick’s budget assumes that Congress will pass a six month extension of the federal subsidies. Without this assistance, governors across the nation, including Patrick, will have to make substantial cuts that could increase unemployment, weaken the economy, and reduce funding for health, education, and social service programs that serve the most vulnerable.



“This is a jobs issue, pure and simple. Without an extension of federal Medicaid assistance, governors will have no choice but to make deeper and deeper cuts to their state budgets at a potential cost of up to 900,000 jobs next year alone. Massachusetts will face budget cuts of approximately $600 million if this extension does not go through before the FY 2011 budget is finalized,” said Sen. Kerry.





The text of the letter is as follows:



February 24, 2010



The Honorable Harry Reid

U.S. Senate Majority Leader

Washington, D.C. 20510



Dear Majority Leader Reid,



We would like to thank you for your personal commitment to the extension of ARRA Medicaid (“FMAP”) assistance and job creation. As you work to develop bipartisan legislative proposals that will help increase employment and rebuild our nation’s economy, we strongly urge you to extend the critical FMAP assistance to states for an additional six months. The urgency for extending the FMAP provision, which expires in December, cannot be overstated. The Congressional Budget Office and Moody’s.com agree that FMAP is one of the most effective tools to generate economic activity. We are deeply concerned that if the FMAP extension does not move with the extensions of unemployment insurance and COBRA there will be little – if any – chance for it to move in any subsequent jobs package before state legislatures approve their 2011 budgets.



States continue to deal with unprecedented budget shortfalls as a result of declining tax revenues, high levels of unemployment, increasing poverty and declining wages. Most Governors will release their budgets in the coming weeks and we expect 30 state legislatures to be finished with their session by the end of May. It is estimated that states will have to close $300 billion in budget deficits in fiscal years 2001 and 2012.



According to standard economic estimates, the budget closing actions that states have indicated they will take in the absence of additional fiscal relief could cost the economy up to 900,000 jobs and derail the fragile economic recovery. In addition, the January jobs report from the Bureau of Labor Statistics indicated that state and local governments accounted for a loss of 41,000 jobs from December to January. This trend is only expected to worsen in the coming months as states close budget gaps. For all of these reasons, the National Governors Association recently sent a bipartisan letter to House and Senate leadership urging an extension of the FMAP assistance for two additional quarters.



We urge you to include a six-month extension of the FMAP provision in upcoming legislation to extend unemployment insurance and COBRA benefits. This short-term extension will help states as they continue to grapple with this recession and protect against state budget actions in 2010 that would further weaken the economy and result in significant jobs losses. Thank you for your time and consideration, and we look forward to working with members on both sides of the aisle to get the economy back on track.



Best Regards,



Senator John Kerry (D-MA) Senator Michael Bennet (D-CO)

Senator Jay Rockefeller (D-WV) Senator Jack Reed (D-RI)

Senator Al Franken (D-MN) Senator Patrick Leahy (D-VT)

Senator Kirsten Gillibrand (D-NY) Senator Arlen Specter (D-PA)

Senator Sherrod Brown (D-OH) Senator Tom Harkin (D-IA)

Senator Carl Levin (D-MI) Senator Tom Udall (D-NM)

Senator Ron Wyden (D-OR) Senator Debbie Stabenow (D-MI)

Senator Barbara Mikulski (D-MD) Senator Chris Dodd (D-CT)

Senator Sheldon Whitehouse (D-RI) Senator Kay Hagan (D-NC)

Senator Bernard Sanders (I-VT) Senator Dianne Feinstein (D-CA)

Senator Robert Casey (D-PA) Senator Robert Menendez (D-NJ)

Senator Roland Burris (D-IL) Senator Tim Johnson (D-SD)

Senator Barbara Boxer (D-CA) Senator Benjamin Cardin (D-MD)

Senator Frank Lautenberg (D-NJ) Senator Jeff Bingaman (D-NM)

Senator Daniel Akaka (D-HI) Senator Mark Begich (D-AK)

Senator Jeanne Shaheen (D-NH) Senator Charles Schumer (D-NY)

Senator Claire McCaskill (D-MO) Senator Herb Kohn (D-WI)

Senator Edward Kaufman (D-DE) Senator Maria Cantwell (D-WA)

Senator Jeff Merkely (D-OR) Senator Mary Landrieu (D-LA)

Senator Daniel Inoyue (D-HI) Senator Bill Nelson (D-FL)

Senator Tom Carper (D-DE) Senator Mark Pryor (D-AR)

Senator Blanche Lincoln (D-AR) Senator Amy Klobuchar (D-MN)