BOSTON (AP) – The state has asked for another two-week extension of its federal health care funding package after federal regulators balked at Massachusetts’ request for up to $3 billion more in Medicaid spending over the next three years.

The federal payments, crucial to the survival of the state’s landmark health insurance law, were set to expire on June 30. But the state has received three two-week extensions, and is looking for a fourth.

That would extend the deadline for reaching an agreement in ongoing negotiations over billions in federal health care funds to Aug. 25, The Boston Globe reported.

The Globe reported that the state is pushing for an increase of up to $1 billion a year for the next three years in Medicaid spending because it expects at least 50,000 more residents to sign up for Commonwealth Care, a subsidized health insurance program for lower-income residents ineligible for Medicaid.

That’s more than expected and comes at time when Massachusetts is dealing with a tight budget and declining revenues.

Massachusetts has been granted waivers from Medicaid rules in order to expand assistance to residents who wouldn’t otherwise be eligible for coverage.

But federal rules require than any expanded coverage not cost more than would have been spent without the waivers.

The actual cost of the expanded coverage that Massachusetts is requesting is one of the points of dispute between state and federal negotiators, the Globe reported.

“If we don’t get everything we are looking for in the waiver, we would either have to come up with the money through (state) reserves, or we would have to cut benefits,” said Senator Steven Panagiotakos, chairman of the Senate Ways and Means Committee.

The issue is a major sticking point as state and federal regulators negotiate over a total of more than $11 billion in federal funds over three years. The money is earmarked for the state’s universal health coverage law, which has provided insurance to more than 350,000 residents, as well as dozens of health care programs.

The Patrick administration has declined to discuss details of the sensitive negotiations.

A spokeswoman for the U.S. Department of Health and Human Services said the agency has recently provided “feedback, specifics, and ideas on how to proceed.” But she said she couldn’t comment further on the discussions.

AP-ES-08-09-08 1334EDT

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