State to Lose More if Federal Demands on Medicaid-funded Program Are Made
October 8, 2008
Sacramento, CA – The state government is set to lose billions of dollars in its Medicaid-funded Family planning program called Family PACT if it heeds the call of federal government to change its calculation method so that the funds can be spent only on legal residents and not undocumented immigrants.
The recent editorial of the Los Angeles Times called the federal demand ‘wasteful’ because it is "ridiculously inefficient arrangement that would increase the state's costs by an estimated 40%". California uses a statistical formula to calculate the number of illegal immigrants who receive the program benefits.
Under federal rules, however, the funds of the Family PACT program must be spent only on legal residents of the state.
Recently, the Bush administration gave the state 30 days to switch to a method that requires residency determinations for each client. As a result, the federal government also imposed a 5% penalty on the program beginning last week until the state agrees to the new rules on how to count undocumented immigrants who use services in the program.
An estimated $315 million of the program's $432 million annual cost comes from the federal government.
According to the La Times editorial, the program has helped poor women avoid unwanted pregnancies and helped reduce abortion rate in the state. This has helped both state and federal government about $ 1.4 billion in maternity care, welfare and schools.