California Gov. Arnold Schwarzenegger signed a bill intended to draw new federal dollars to the state under a match rate enhanced by federal economic stimulus efforts, as well as generate funding for children’s health insurance. But the money isn’t quite in the bag because the bill’s backers were forced to gut provisions from the bill in order to get it through the state’s politically rancorous General Assembly.
Schwarzenegger signs measure to attract bigger federal match
The legislation levies a temporary fee on hospitals, and the bulk of the proceeds would be used to take advantage of a 62% match rate—up from 50%—in effect for California through the end of 2010 under the American Recovery and Reinvestment Act of 2009. About $2.2 billion in new federal funding would be returned to hospitals as supplemental payments by Medi-Cal, the state’s Medicaid program, according to the California Hospital Association, which pushed for the levy. About $320 million raised by the fees would go toward expanding state-funded children’s health insurance, the association said.
State officials must seek federal approval for the program, and those efforts will be hampered by compromises made in order to allow lawmakers to pass the bill with a simple majority. A clause that would have made the bill effective immediately was stripped, as were the funds appropriated for implementation and the authority to disperse any of the money raised.
Schwarzenegger noted in a signing statement that the bill requires subsequent action from the Legislature. Anne McLeod, the hospital association’s vice president for finance policy, said the governor’s signature was an encouraging step. “We think we can see this through,” McLeod said.
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