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Patrick Springer, Published January 02 2009

ND Medicaid could get $66M boost from plan

The new economic recovery package could contain a boost of $66 million in additional federal support for North Dakota’s Medicaid program to provide health coverage for the poor and elderly.

The figure is from an analysis by Families USA, an advocacy group for health consumers, of a leading stimulus package deemed likely to emerge when the new Congress meets this month.

The additional federal support, proposed to enable struggling states to maintain their health safety net, would translate into more jobs and a projected $102 million in new business activity, an analysis by Families USA shows.

Nationally, the additional support for state Medicaid programs could total $40 billion, a figure sought by the National Governors Association.

At that level, Minnesota’s share of additional federal Medicaid dollars would be $779.6 million, according to the Families USA calculations.

Those payments would provide a big shot of economic medicine to states, Ron Pollack, executive director of Families USA, told reporters in a telephone news conference.

“They have a very significant impact as well as improving state economies,” he said.

The estimated economic benefits to the states come from applying models used by the U.S. Bureau of Economic Analysis, Pollack said.

Forty-three states, including Minnesota, face budget deficits. Nineteen states have enacted or proposed cuts to their Medicaid programs or health insurance for children programs.

“North Dakota is not looking at cutting services or cutting eligibility,” said Maggie Anderson, director of medical services for the state Department of Human Services.

In fact, under Gov. John Hoeven’s proposed budget, the state would increase payments to medical providers by 7 percent each year of the 2009-11 biennium, she said.

That would mean an additional $8.1 million in state funding for hospitals, and an additional $4.9 million in state funding for doctors and clinics, Anderson said.

“It’s really hard to speculate what the economic stimulus package may or may not do,” she added.

When he announced his budget plan in early December, Hoeven proposed increasing state support for Medicaid by $126 million, with $10 million of the increase to cover the state’s share of funding for the program.

In Minnesota, where deficits for the current and pending budget are estimated at up to $5.2 billion, officials have capped enrollment in a program for people with disabilities, according to Families USA.

Minnesota also reduced its Medicaid spending by $25 million by trimming payment rates and delaying payments to hospitals, and by reducing reimbursements to pharmacies, cost-cutting moves that could be continued.

Similar cuts, or even more stringent measures, are slated to take place in many other states unless the federal government delivers additional support for Medicaid, Pollack said.

“It means the health care safety net is very much at risk when the budgets are strained,” he said.

Readers can reach Forum reporter Patrick Springer at (701) 241-555