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Coverage for millions – especially kids – at stake in governors’ request

Florida Gov. Rick Scott and other Republican governors are asking the federal government to give them more power to trim Medicaid eligibility to help control costs.

But a report released today has a different take on the situation: It credits federal requirements with helping avoid cutbacks in Medicaid and children's health programs, as states have dealt with huge budget shortfalls during the past year.

"Keeping these programs stable and strong has helped protect children and avoid an even larger increase in the nation's 50 million uninsured and will be key to ensuring the success of health-reform implementation over the next few years,'' Diane Rowland, executive vice president of the Kaiser Family Foundation, said in prepared statement.

The report, released by the foundation's Commission on Medicaid and the Uninsured, found that eligibility and enrollment requirements remained the same or improved in almost every state during 2010 in the Medicaid and Children's Health Insurance Program.

A major reason is that the federal government used its leverage to impose what is known as a "maintenance of effort'' requirement. That requirement was attached to federal-stimulus money that states received and also was included in the sweeping federal health law that Congress and President Obama approved last March.

Under the stimulus funding, states were required to maintain Medicaid eligibility and enrollment rules to be able to receive additional money that was critical for many --- including Florida --- to balance their budgets. The federal health overhaul includes a similar requirement, as a way to avoid cuts in Medcaid coverage until the law fully takes effect in 2014.

But the Kaiser report came just four days after Scott and 32 other governors or governors-elect sent a letter to the federal government asking it to eliminate maintenance-of-effort requirements. The letter pointed to "unprecedented budget challenges'' facing the states in the coming months.

"The effect of the federal requirements in unconscionable; the federal requirements force governors to cut other critical state programs, such as education, in order to fund a 'one-size-fits-all' approach to Medicaid,'' the letter says.

With Florida's Medicaid rolls steadily growing during the economic recession, the letter says the state faces an additional $2 billion in spending on the program during the 2011-12 fiscal year.

"It is imperative that we stop federal health-care mandates that tie the hands of states," Scott, a fierce critic of the federal health law, said in a prepared statement. "Florida should get to determine what program is the right fit for our state in terms of a Medicaid program, and the federal mandates are essentially the federal government telling us what program will work best for our state, while we are forced to pick up part of the bill."

It remains unclear what parts of Medicaid could be targeted if Scott and lawmakers had more power to make changes. But lawmakers in the past have repeatedly considered cuts to programs such as the Medically Needy program, which provides costly care to transplant recipients and other people with serious medical conditions.

An executive summary of the Kaiser report acknowledges the budget problems facing states but also concludes that Medicaid coverage needs to be maintained.

"Looking ahead, states face the challenge of implementing reform while at the same time dealing with significant budget pressures due to the nation's continuing economic problems and the corresponding increased need for Medicaid and CHIP,'' the summary says. "To continue forward progress and keep the foundation solid, it will be important to focus on sustaining the coverage gains and progress made to date, even in the face of these challenges.''