Maine's two "centrist" Republican senators are putting state governments in quite a pickle. To lower the cost of a Democratically-authored jobs bill that would extend the filing deadline for emergency unemployment benefits, Sens. Olympia Snowe and Susan Collins want to curtail an extension of the enhanced Medicaid matching rate included in last year’s stimulus bill. That could force states to reduce coverage for folks that use the public health plan or spend more on Medicaid in 2011 than they had originally planned, creating new holes elsewhere in those budgets.
Both options are terrible. We've already seen how funding cuts have impacted social services statewide. And lowering Medicaid spending, even marginally, can produce a nasty ripple effect on the broader economy. Reduced coverage means the working poor must find more expensive health insurance, the state's federal matching funds shrink, and business declines for professionals who rely on Medicaid reimbursements for their livelihood -- medical providers, technicians, custodians, and health care administrators. Marc Zandi, chief economist of Moody’s Economy.com, estimates that some 200,000 jobs could be lost if Congress doesn't pass along the full Medicaid assistance for six months.