Bush’s FY 2003 Budget Does Not Include Increase in Medicaid Funds Requested by New York State

The Bush administration on Feb. 4 rejected New York's request for a 3% boost in the federal Medicaid matching rate for the state, "jeopardizing" a $4.5 billion health care package passed by state lawmakers in January that is partially contingent on the increased funding, the Albany Times Union reports. The increase in the matching rate from 50% to 53% was not included in the proposed HHS budget presented by Secretary Tommy Thompson, who said the administration's "first priority is to reform and strengthen Medicare," and only after that would it address Medicaid. New York Gov. George Pataki (R) had been counting on the Medicaid increase to cover $1.8 billion of the health care package, which contains salary increases for the state's health care workers, among other provisions. In addition to the Medicaid increase, the state is relying on a 39-cent hike in its cigarette tax and $1 billion that it will receive from the health insurer Empire Blue Cross Blue Shield as part of its conversion to a for-profit company. Pataki spokesperson Michael McKeon said that the state has enough money to pay for the package through July 2003, after which time state taxpayers might be forced to foot the bill. However, McKeon said that the state is hopeful that the Medicaid increase will eventually happen. Pataki also indicatedhe would ask Congress to approve the Medicaid funding increase. The Times Union reports that the Senate passed an amendment last week to increase the federal government's share of Medicaid payments, but action in the House is uncertain (Jordan, Albany Times Union, 2/5).