Medicaid Funds Under Scrutiny in Report

by Chris Woodward

Source: OneNewsNow –

A new report finds that most states with smaller poverty populations receive a larger share of federal Medicaid funds, while states with larger poverty populations receive less.

The report was done by Pamela Villarreal and Michael Barba of the National Center for Policy Analysis (NCPA). Villarreal says the problem has to do with the current Medicaid formula, which ironically is designed to cover any disparities between rich and poor states.

"What the federal government does is provide a match-up to a certain amount per every Medicaid dollar that a state spends on its program. Part of the flaw in the formula is the more states spend, the more they obviously receive," says Villarreal.

One state receiving a larger share of federal Medicaid funding is New York, which has a much lower poverty population than California and Texas and about the same as that of Florida. Even so, New York still receives a larger share because it has a larger program and spends more.

Villarreal warns the financial burdens will only get worse beginning in 2014 when the new healthcare law will require states to cover additional populations, including single people who are up to 133-percent of the poverty level. She adds: "The federal government is going to help provide additional money for about three years -- but then once that money tapers off, the states may not have the funds to do it.”

The NCPA representative says the solution is to stop expanding Medicaid and allow states the flexibility to spend their funding however they see fit, while capping those federal funds at a certain dollar amount.

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