Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from Richard Close with Jefferies & Co.
Richard Close - Jefferies & Co.
A quick question, with respect to the stimulus package and the states getting money, just want to maybe dive down a little bit deeper on that front, and then SCHIP expansion as well, with the increase in these programs, I guess would seem that maybe you guys are at a disadvantage as the states are getting more money and what not, just go over why you benefit again from the stimulus and why may be you’re not at a disadvantage there.
William C. Lucia
When you look at the FMAP increase and the additional $86 billion that are going to states, and you also read state newspapers in capitals, you notice that these dollars are really going to help close Medicaid budget gaps which exist in every single state in the union. What it’s doing is keeping states from cutting provider rates, from changing eligibility guidelines; in fact, one of the restrictions to these funds is that you have to not have limited eligibility guidelines in any way and if you have rolled back those cuts so that you can use these dollars. So, this influx of money really only helps them through state fiscal year 2010, so, let’s keep that in the backdrop; really helps them keep the program afloat and bring more people in. Will they administratively use some of these dollars to do some other things in the agency? Yes, they’ll probably bolster their enrollment eligibility and case workers out in the field who have to handle all these enrollments as many states are backlogged, but as the dollars continue to build, the cost containment activities at the back end or at the front end continue to be extremely important to these states.
Robert M. Holster
You don’t see that replacing our activity whatsoever. In fact, our states are very interested in figuring out how to use our services so that when the federal funding stops, it’s a good program to replace.
Richard Close - Jefferies & Co.
And then, just walk us through on the COBRA side of things; do you think that if COBRA is being extended that may be that’s a disadvantage in terms of people switching over to Medicaid or slowing down that switch to Medicaid; if you could walk through that and how that benefits you as well.
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