NEWS RELEASE
Committee on Energy and Commerce
Congressman John D. Dingell, Ranking Member

Dingell Introduces Bill to Restore Medicaid Funding

States Face Cuts Due to Change in Funding Formula

Washington, D.C. - In an effort to protect States from Medicaid funding cuts, Congressman John D. Dingell, Ranking Member of the Committee on Energy and Commerce, today introduced legislation that would prevent 34 states from losing a total of $730 million in funding.

“States are already struggling with their budgets and cannot afford to shoulder the costs the Federal government keeps trying to shift to them,”said Dingell. “Cuts to Medicaid will make a bad situation worse not only for States, but also the children and families covered under the program.”

Next year, 29 States stand to see a decrease in their Federal Medicaid funding as a result of a technical calculation by the Centers for Medicare and Medicaid Services (CMS). Fifteen of these States are projected to have a decrease of greater than 1 percent. Changes of this magnitude are rare and for most States are coming on top of cuts to funding in the two prior years as well. In addition, 11 States will see their Federal funds reduced due to unfunded employer pension obligations. These reductions are in addition to the Administration’s proposed Medicaid cuts of $10 billion over five years.

Congressman Dingell’s legislation, the Medicaid Formula Fairness Act of 2005, would limit the loss of States’ Medicaid funding to 0.5 percentage points in 2006, which would restore $442 million in lost Medicaid dollars to 18 States. Further, it would protect States from reductions in Federal funding as a result of CMS retroactively applying a change to the Medicaid funding formula for the years 2001 and 2002. This would provide approximately $229 million for an additional 10 States. Additionally, the bill would protect 11 States from formula-driven reductions resulting from employee pension transfers, providing $59 million more.

Much of the bill is similar to S. 1007 introduced by Senators Bingaman, Snowe, Rockefeller, Hutchison and Jeffords.

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