States Resist Medicaid Growth -- Governors Fear For Their Budgets

From The Washington Post:

The nation's governors are emerging as a formidable lobbying force as health-care reform moves through Congress and states overburdened by the recession brace for the daunting prospect of providing coverage to millions of low-income residents.

The legislation the Senate Finance Committee is expected to approve this week calls for the biggest expansion of Medicaid since its creation in 1965. Under the Senate bill and a similar House proposal, a patchwork state-federal insurance program targeted mainly at children, pregnant women and disabled people would effectively become a Medicare for the poor, a health-care safety net for all people with an annual income below $14,404.

Whether Medicaid can absorb a huge influx of beneficiaries is a matter of grave concern to many governors, who have cut low-income health benefits -- along with school funding, prison construction, state jobs and just about everything else -- to cope with the most severe economic downturn in decades.

[C]ongressional Democrats are sufficiently alarmed about the potential impact that they already are seeking special protections for their states. Even Senate Majority Leader Harry M. Reid cut a deal with Senate Finance Committee Chairman Max Baucus (Mont.) to ensure that the federal government would pay the full cost of expanding Medicaid in Reid's state, Nevada.