Image: Obama
J. Scott Applewhite  /  AP
President Barack Obama returns to the White House Friday after a trip to Baltimore where he met Republican members of the House of Representatives during their retreat.
updated 1/29/2010 3:53:36 PM ET 2010-01-29T20:53:36

The Obama administration will propose giving cash-strapped states about $25 billion worth of help with their Medicaid budgets when presenting its 2011 budget on Monday, a White House official with knowledge of the plan said Friday.

The proposal would extend for six months — until July of next year — the help that states got in last year's economic stimulus bill with their Medicaid programs.

Under the Medicaid initiative, the federal government takes on a higher share of state Medicaid costs, with every state getting an additional 6.2 percent of its Medicaid budget paid for by the feds. States with higher unemployment rates get additional help.

Large states with generous Medicaid programs such as California and New York stand to benefit most from the plan.

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The official demanded anonymity because he's not authorized to publicly discuss the budget before its release.

The administration argues the program provides a twofold benefit to states. First, it helps ensure Medicaid coverage for the poor and disabled. Advocates of the measure also say it helps states retain employees since the additional Medicaid money allows them to shift funds elsewhere.

Republican critics of the stimulus measure say the measure hasn't produced enough jobs, especially in the private sector.

While the Medicaid money wouldn't start flowing until January of 2011, Capitol Hill Democrats want to pass it within weeks so that state governments can plan next year's budgets.

In fact, the House has already passed the extension, as part of the health care overhaul and, later, as an element of a $174 billion "jobs" bill passed last month. There's no certainty, however, that the Medicaid plan can make it through the Senate next month as part of a bill extending unemployment benefits.

The move was announced on a conference call that Health and Human Services Secretary Kathleen Sebelius had with governors Friday, the official said.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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