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As Democrats and Republicans work to pass their next round of coronavirus relief funding, money for Medicaid could prove tricky to resolve.

Senate Republicans did not include a funding increase for Medicaid in its COVID-19 relief bill released earlier this week, despite dire calls from Democratic and Republican governors. 

Nearly every state is dealing with massive budget shortfalls due to the pandemic, and governors have cautioned that they could have to cut Medicaid if they don’t receive help from Congress. Despite that, Republicans in the Senate argue that increasing funding for the health service would be a “bailout” of state and local governments, according to The Hill.

The Medicaid program is paid for jointly by states and the federal government. It already provides medical coverage for about 70 million people in the country, but the need is expected to grow as many Americans have lost their jobs due to the pandemic. 

At the same time, state budgets have been hit hard by the pandemic, with increasing costs for COVID-19 treatment and services as tax revenues fall sharply, leading to significant budget shortfalls. 

It’s not unheard of for governors to cut their state’s Medicaid programs. Funding the health insurance program can make up a large portion of state budgets, about 20%, according to The Hill. The program is usually cut by governors during recessions or other economic downturns. 

In order to avoid these cuts, especially when so many more people need access to the program, the National Governors Association and the National Association of Medicaid Directors called on Congress to increase Medicaid funding. This would help cover increased enrollment costs and allow states to use their money for other areas that desperately need funding, like education. 

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The House and Senate will need to negotiate a compromise to reach a final agreement in the next couple of weeks. 

Republicans and Democrats have struggled with how to fund the program for years. Senate Republicans and the Trump Administration have argued that the program should be reduced and there should be fewer individuals using the service that do not have children. 

Even though Congress passed a coronavirus relief bill back in March that increased the amount of funding coming from the federal government governors have said it’s just not enough. 

“The COVID-19 pandemic is drastically shrinking state and local revenue with most states experiencing a budget shortfall ranging between 5 and 20%,” the National Governors Association wrote congressional leaders in July. “Even states with a lower shortfall will be challenged to provide adequate healthcare services to their residents. This leaves state and local leaders with tough choices to balance their budgets while responding to a pandemic.”