SACRAMENTO - Adding to the budget woes in California, after nearly two months of debate and negotiations, federal legislation remains hopelessly stalled in the US Senate in Washington DC, that would, among other things, extend for 6 months (January 1, 2011 to June 30, 2011) the temporary increase in Medicaid matching funds to the states that is set to expire December 31, 2010.

The US House of Representatives, last month, eliminated that extension from its version of the bill.

The legislation, HR 4213, often referred to as the “extenders bill” because it extends benefits or temporary increases in federal funding for several programs, including unemployment benefits, is crucial to all the states, including California. The temporary increase in federal Medicaid matching funds was originally part of the American Recovery and Reinvestment Act (ARRA) that is currently set to expire December 31, 2010 unless Congress approves an extension. Governors from at least 47 states, including California, have urged Congress to pass the extension.

If Congress does not pass the extension of that temporary increase in Medicaid funding, California’s already enormous budget deficit of $20 billion would increase by at least $2 billion, because the Governor’s proposed State budget for 2010-2011 assumes the State will receive that increase. The loss of $2 billion – adding to the existing projected State budget hole, would put enormous pressure for even more spending cuts to critical health and human service programs in the state

US Senate Democrats Offer Up Scaled Back Version of Bill

The version of the bill US Senate Democrats offered Thursday scaled back spending, including the extension on the Medicaid increase but US Senate Republicans – and at least one US Senate Democrat – refused to support it unless the extensions were off-set by spending reductions rather than add to the US budget deficit. The motion to end debate on that version of the bill failed late on Thursday by a vote of 57 to 41 with all Republicans present opposing it, joined by 1 US Senate Democrat, US Sen. Ben Nelson (Democrat – Nebraska). Not voting were Robert Byrd (Democrat – West Virginia) and Lisa Murkowski (Republican – Alaska). Both California US senators – Dianne Feinstein and Barbara Boxer supported the bill.

Next Steps for HR 4213 in US Senate

· Senate Majority Leader Harry Reid (Democrat – Nevada), angered by the stalemate and facing a closely contested re-election battle in his home state, said that US Senate Democrats would move for a vote on Monday (June 28th) on a different bill, focusing on small business jobs instead.

· He declined to indicate if and when US Senate Democrats would try again to push the “extenders bill”, HR 4213, though efforts to try to come up with a compromise in order to win support from at least 2 US Senate Republicans are reportedly continuing. Still, with time running out before Congress recesses for nearly a month in August and also in the weeks before the November elections, prospects for passage appear bleak.

· Even if the US Senate is able to pass a bill to extend the temporary Medicaid funding increase, it would still face enormous hurdles because it would have to go to a “conference committee” to work out differences with the version of the bill already passed last month by the US House of Representatives, which deleted any extension of the temporary increase of federal Medicaid matching funds to the states.

· Whatever comes out of conference committee would then still need to be approved by another vote in both houses before it could go to the president for his signature.

Impact to People With Disabilities, Seniors in California

Failure to extend the temporary increase in federal Medicaid matching funds to the states would have enormous impact particularly for California which would stand to lose about $2 billion and it’s funding for services to children and adults with disabilities, mental health needs, the blind, seniors, community organizations, facilities and workers who provide supports and services.

That level of funding loss would be certain to force policymakers to consider or revisit proposals for additional deep cuts to the state’s Medi-Cal program, and other health and human services including regional centers that coordinate services to people with developmental disabilities, senior and mental health services.

Meanwhile, at the State Capitol in Sacramento, the Budget Conference Committee, chaired by Sen. Denise Ducheny (Democrat – San Diego, 40th State Senate District) did not meet June 25 and, barring a surprise development, will not meet over the weekend.

There is not a set time next week when the Budget Conference Committee will meet – though it is almost certain to meet sometime next week before the start of the State’s 2010-2011 budget year on July 1st.

The Budget Conference Committee last met yesterday (June 24th) and took some action on “open” items in budget areas dealing with resources, general government and one item in human services – foster care – but did not review or take action in the other budget areas in human services, health (including Medi-Cal, regional centers) or education.

California is faced with a shortfall of $20 billion with sharply different plans to close it put forward by State Senate Democrats, Assembly Democrats, Legislative Republicans and the Governor, that differ in detail, scope of spending cuts and revenues. No budget agreement is in sight – and a long drawn out stalemate through the summer seems almost certain at this point.

Congress Temporarily Delays Cut to Medicare Doctors

Congress however did agree to a six month delay in the 21% reduction to doctors in the federal Medicare program which provides certain health care services primarily for seniors. That reduction, which took effect June 18th, would be delayed once the bill is enacted.

The US House of Representatives approved on Thursday (June 24th) the 6 month delay of the cut to doctors in the Medicare program by a vote of 417 to 1, agreeing to the US Senate action, which passed June 18th with support by Democrats and Republicans.

The bill is sometimes referred to as “doc fix” and the reduction has enormous impact on seniors across the nation and in California who are in the federal Medicare program (different from the Medicaid – called “Medi-Cal” in California – program).

Last fall the House passed a “omnibus” spending bill that also included a provision that would have stopped permanently the Medicare cut to doctors – but that provision failed to survive in the US Senate.

Instead, US Senate Democrats tried to include a limited one year delay of that Medicare reduction to doctors as part of the “extenders bill” that also included extending unemployment benefits and also extension of the temporary increase in Medicaid matching funds to the states.

But with that “extenders bill” stalled, US Senate Democrats decided to push the 6 month delay in the Medicare cuts to doctors in a separate bill – which did pass overwhelmingly with support from Democrats and Republicans. The measure now heads to the president, who is expected to sign it.

Medicare Cut Impacts Seniors and Also People With Disabilities

The Medicare reduction – and delay of that reduction, doesn’t directly impact the size of California’s budget deficit since, unlike the Medicaid program, no state funds are matched in the Medicare program.

The reduction – and the delay of that reduction – advocates say have tremendous impact on the availability of health care for tens of thousands of seniors across the State, including thousands of seniors and persons with disabilities who are eligible for Medicare and Medicaid services (sometimes referred to as “dual eligibles” or “Medi-Medis”)