JACKIE JUDD: Good day. I am Jackie Judd with Health on the Hill. A Bill providing states with $16 billion to help cover Medicaid payments in 2011 is now law. President Obama signed the measure soon after final passage by the House. We discuss that and more today with Jennifer Haberkorn of POLITICO and Mary Agnes Carey, senior correspondent for Kaiser Health News. Welcome to you both. What is the significance of the Bill to the states?

MARY AGNES CAREY: Well, state governors, both Democrats and Republicans, have been pushing for this additional funding. They said they’ve had to make job cuts and budget cuts and they would have had to make more if it hadn’t come through, so I think there will be a big sigh of relief on their part that. As you know, the bill has passed and has become law. They are going to get this aid that they’ve been counting on and many have already put it in their state budgets.

JACKIE JUDD: But originally they wanted even more, so what will happen to the Medicaid programs because of the gap between what was originally proposed and, in some cases budgeted for, and what was now appropriated?

MARY AGNES CAREY: Well at one point earlier, as you note, the bill had proposed as much as $24 billion in Medicaid funding, but again this continuous conversation of how do you pay for things, how do you have it fully financed, brought it down to $16 billion, so I think that states may still have to make some cuts, some reductions. We will wait and see what that means.

And also we have to keep our eye on the economy. As we know, when people lose their jobs, they lose their health care coverage, they go to Medicaid. Where will those Medicaid rules be in the next six months? How much might they increase? Maybe they will decrease as the economy improves. I think it’s something that bears watching.

JACKIE JUDD: Jennifer, one of the things I found so interesting was that the administration, and Democrats on the Hill as well, position this bill as a jobs bill. I don’t think I heard the President utter the word Medicaid. Why not?

JENNIFER HABERKORN: That is right. Really, Medicaid kind of got swept under the table, even though it’s a huge portion of this bill, and it all became about teachers and saving teachers and saving jobs. I think the majority leader, Harry Reid, has been talking about every bill as a jobs bill. The speaker has been saying the same thing, every bill is a jobs bill. And I think there is a little bit of health fatigue and Medicaid is a touchy issue with the states. I think that was part of the reason for that, but also it is all about the economy and jobs and the election, and I think we are seeing that as health plays a smaller role.

JACKIE JUDD: As we know, there were some primary elections yesterday in a number of states. Did we get any clue about how health care reform is playing in the states, given the election results?

JENNIFER HABERKORN: I think we have a couple of small clues in some of the previous primaries. We saw that [among the winning] candidates the White House was backing one, which goes against what we had seen in previous primaries, a good sign for them.

JACKIE JUDD: In Colorado, you’re talking about?

JENNIFER HABERKORN: Colorado, that’s right. I think also we’re seeing that health isn’t playing a huge role that we were maybe expecting back in March and April when Republicans and Democrats were both saying we are going to be campaigning on this. Republicans were saying we’re going to get everyone out of office that passed this bill and Democrats were saying we are going to be campaigning on this. We are proud of what we passed. We are proud for doing X, Y, and Z. But now we’re seeing that it gets close to the election that it is scaling back. We are not seeing that as much, like I said, as it becomes more about jobs.

JACKIE JUDD: Are you hearing Republicans talk anymore about actually trying to de-fund the measure?

JENNIFER HABERKORN: I think they are going to be talking about that through the election because that is really all that they can do. They would of course love to repeal it, but that is not even a possibility for a number of years, so I think their message is going to be if you elect us, we will de-fund it.

JACKIE JUDD: This time last year, in August, lawmakers were coming home to very angry electorates, holding town meetings, hearing about the so-called “death panels.” Is the tone very different for lawmakers in their home districts now, Mary Agnes?

MARY AGNES CAREY: The lawmakers I’ve been talking to have said that the conversation on health has shifted from “should we do this?” to “how is this going to work for me?” People have very specific questions, whether it is the provision about keeping their children up to age 26 on their health insurance policies, or what it means for Medicare.

They are really, really focusing in on specifics on health, and then again the bigger issue at these town hall meetings now seems to be the economy. People are worried about if they haven’t lost their job, will they lose their job? They know their neighbors lost their job. Where is the economy going? What is Congress doing to help or maybe hurt, in their opinion, the economy and I think the conversation has really shifted.

Members I’ve been talking to just don’t anticipate a lot of the sort of carnival atmosphere if you will from last year’s town hall meetings when people were really, the health care issue was spiraling out of control and it was very explosive. They don’t get that. They don’t have that feeling that is going to be the case this year.

JACKIE JUDD: And for lawmakers who supported the health care reform bill, this August they could come home and actually talk about some so-called deliverables, the seniors getting $250 checks if they hit the donut hole, what else is out there that lawmakers can tell, if they choose to?

JENNIFER HABERKORN: Yeah, there is a whole series of provisions, as you guys know, that go into effect September 23rd they have really been pushing. The donut hole, keeping your kids on your insurance until age 26, a ban on denying kids for preexisting conditions, I think we are really going to see them kind of hammering home those points.

But I think it is interesting that they are getting questions, not only on how does this affect me? They are very specific, they are saying I have a 25-year-old kid, how does this affect me? But also, Tom Pariello in Virginia got a question at a town hall recently saying “my premiums went up 30-percent, why isn’t the law helping me yet?”

So I think that shows that Democrats really own the law now, and own health, so if someone’s premiums are going up, even if it is unrelated to the law, they have to take responsibility for that now, and Pariello’s response was kind of interesting. It was “yeah, that’s going to happen, but we needed this law and it is going to do all these other good things.”

MARY AGNES CAREY: And over time it will help you reduce your costs. I mean that is the promise of the health reform for people who may not, they are not going to be in the Medicaid expansion, they are not going to get a subsidy to buy coverage on the exchange, they may not have a child up to age 26, they may not be an early retiree who would benefit. The hope is over time that your premiums will cost less. We will have to see if that actually happens.

JACKIE JUDD: One last quick question, Mary Agnes, Congress is out through Labor Day weekend. When they come back, what do they face in terms of health care policy legislation?

MARY AGNES CAREY: I think it will be pretty quiet on health care policy. Of course, one thing that we have talked about in previous sessions here is talking about the COBRA extension, would COBRA be extended for people who have lost their job since June 1st?

Proponents of the bill still hope they can attach it, much as Medicaid was attached to this jobs package, it is unclear if that will happen. I think that will still be there, but there are a lot of other issues I think Congress will be focused on rather than health. But that certainly doesn’t stop any member of Congress, especially Republicans that opposed the bill, going to the floor to talk about the individual mandate, going to the floor to talk about how this impacts Medicare. It will still be part of the conversation. I am not sure you will see legislation moving on any particular health area.

JACKIE JUDD: Okay, thank you both very much, Jennifer Haberkorn and Mary Agnes Carey. Thank you for joining us. I’m Jackie Judd.