Pennsylvania May Get Seventy Percent of Special Medicaid Funding

It now looks like the state might get about 70 percent of the $850 million in additional federal Medicaid funding that it’s been counting on, state Senate Republican leader Dominic Pileggi said today.

Nothing is certain yet, he said, but that would mean the state would get $595 million instead of the full amount — assuming that the U.S. Congress approves the additional funds in the next month or so. Getting only 70 percent of the federal money would still require some employee layoffs, but not as many as with the loss of the entire $850 million.

Legislative leaders held a brief conference call this morning with Gov. Ed Rendell to talk about preparing a contingency plan to use in case Congress doesn’t approve the full $850 million in Medicaid money. Specifics haven’t been worked out yet, Mr. Pileggi said.

Cutting the $28 billion state budget to absorb the loss of $255 million “would be a smaller problem than losing the full $850 million, but it’s still a problem,” he said. “The governor is optimistic that we will get at least a substantial part of the $850 million. There is at least some basis for hope of federal action.”

Mr. Rendell has said that up to 20,000 layoffs of state, county and municipal employees could be needed to absorb the loss of the entire $850 million in Federal Medicaid Assistance Percentage funds. The U.S. Senate may vote this evening on the additional funds, but the U.S. House isn’t expected to vote until after Labor Day.

If the U.S. Senate defeats the funds tonight, then a contingency plan for cutting state spending is necessary immediately, Mr. Pileggi said. He said leaders may meet with Mr. Rendell on Wednesday morning about that.