WASHINGTON — Wedged in the House health care bill is $23.5 billion that looks a lot more like new federal stimulus spending than anything to do with national health care reform.
The barely debated pot of money would allow Congress to continue pumping billions in new short-term aid to states to cover Medicaid costs that have increased with rising unemployment in the past year.
The potential impact of the new spending became clear last week when giddy state budget officials in capitals from Annapolis to Sacramento penciled in the revenue, hoping that if health care legislation survives in the Senate, the states' bonus might squeak through.
Medicaid relief for states comprised one of the biggest pieces of February's $787 billion federal stimulus package, but that funding will run out next year, halfway through states' next round of spending plans.
Under the Affordable Health Care for America Act, the federal government would continue to pay a higher share of all Medicaid costs — 66 percent on average, up from 57 percent before the stimulus — for an additional six months, and erase in one fell swoop a major chunk of states' projected shortfalls for the coming year.
House Republicans, who had repeatedly blasted the cost of the bill, never directly attacked the additional state funding in the final floor debate leading up to the Nov. 7 vote, even as they charged in other contexts in recent weeks that Democrats were trying to increase federal spending without introducing a second stimulus package.
Only one Republican, Rep. Don Young of Alaska issued a statement before the vote condemning the $23.5 billion, saying the funding would only delay the inevitable. In six months, he said, states again would not have enough to cover their Medicaid costs.
Chris Whatley, Washington director for the nonpartisan Council of State Governments, said he sees an explicit political motive on the part of those backing the House bill.
"It would force states to absorb huge new Medicaid cost loads, and they want states to look past their immediate crisis and believe it's going to be okay. It's a sugarcoating to help them swallow a very bitter pill."
The provision, Sec. 1749 of the House measure, would extend through June 2011 an across-the-board 6.2 percent increase in federal Medicaid matching money, as well as additional percentage-point benefits that most states now qualify for because of high unemployment rates.