Some state policymakers opposed to health reform’s Medicaid expansion continue to argue that the federal government will likely renege on its commitment to permanently pick up nearly all of the cost. Some assert that Congress frequently changes the formula that determines what share of states’ Medicaid costs the federal government will cover (also known as the FMAP). As we noted in February, that’s false, and a new report from the Urban Institute concurs.
The report finds that policymakers have only cut the FMAP once, in 1981, when President Reagan and Congress enacted a temporary cut. The most recent FMAP changes were temporary increases to give states fiscal relief during the past two economic downturns.
States are headed down divergent paths based on whether they have expanded Medicaid. The 27 states (including the District of Columbia, see map) that have taken up the Medicaid expansion are experiencing large gains in health coverage. As a result, hospitals are providing much less uncompensated care than just a year ago.
Unfounded concerns of a future drop in the federal matching are no reason for the remaining states to stay on the sidelines and miss out on the many benefits of expansion.