WASHINGTON – Hundreds of federal and state stakeholders are urging Congressional leaders to extend Medicaid funding established under the American Recovery and Reinvestment Act.

ARRA provided $87 billion in additional FMAP and other Medicaid funding to shore up struggling state budgets through December 31, 2010. In a letter to Congressional leaders issued last Wednesday, stakeholders urged Congress to extend the support for state Medicaid programs through June 2011 or later.

The organizations, which included the American Hospital Association, the American Healthcare Association, Families USA, Medicaid Health Plans of America and the National Association of Public Hospitals and Health Systems, said unless the support is extended, many states will be forced to scale back on Medicaid coverage.

Those cuts, if enacted, would affect more than Medicaid coverage in the states, the organizations told House and Senate leaders. "These state budget cuts will have a ripple effect throughout the economy and, according to economic estimates, could result in the loss of 900,000 jobs," they wrote.

According to a Dec. 9, 2009 report issued by the Kaiser Family Foundation's Commission on Medicaid and the Uninsured, most states have managed to safeguard and, in some cases, expand healthcare coverage for children and parents in their Medicaid and State Children's Health Insurance (SCHIP) Programs in 2009.

States attributed their financial solvency to funding they received from ARRA and legislation to refinance the SCHIP program.

State health officials said the 2009 gains could serve as a base for covering millions more people under health reform. Despite the gains, however, the programs are threatened by the impending end of key federal assistance at the end of 2010.

According to the study, 15 states reported they had to scale back their SCHIP programs during 2009.

According to Diane Rowland, executive vice president of the Kaiser Foundation and executive director of the foundation's Commission on Medicaid and the Uninsured, state revenues "are still mired in a severe slump," with more cutbacks likely if Congress doesn't act.

Stakeholders for Medicaid programs have banked on healthcare reform passing in 2010, which would provide additional funding.

As Congress continues to struggle with finding compromises between House and Senate healthcare reform plans, many observers are beginning to question the likelihood of a federal healthcare overhaul package passing this year.