Director of Housing and Health Integration
Update, April 21, 2020: Please click here for an updated analysis that reflects Congressional Budget Office estimates and new 2018 state data, and that addresses anomalies in New York’s historical expenditure data that make the estimate below a significant overstatement of the state’s likely funding increase.
Update, March 13, 2020: We’ve updated this post to reflect the House bill reportedly under consideration, which would raise the federal Medicaid matching rate by 6.2 percentage points rather than 8 percentage points.
The House COVID-19 bill’s temporary Medicaid funding boost, if in effect for all of calendar year 2020, would deliver roughly $35 billion in immediate, needed relief to states, which will face growing costs due to the virus and a likely economic downturn. (See table for state-by-state estimates.) Similar measures have been a critical part of economic stimulus packages under both Democratic and Republican administrations, and policymakers should approve the increase as soon as possible.
Once they enact the legislation, policymakers should quickly move to take further bold steps to address the public health emergency, bolster an economy that could rapidly deteriorate, and address hardship from both the public health crisis and an economic downturn. These next steps should include additional Medicaid funding increases, help for workers who lose their jobs, and measures that boost incomes and purchasing power.
The House bill’s increase — a 6.2 percentage point boost in the federal matching rate (known as the federal medical assistance percentage, or FMAP) from January 1, 2020, until the end of the public health emergency — would:
After raising the FMAP and adopting other policies in the House bill, policymakers should quickly enact additional needed steps to address the public health emergency, the significant threat of a rapid and steep economic downturn, and the fiscal relief that states will need as a result. This should include additional or longer-lasting FMAP increases linked to the state of the economy. The House bill’s 6.2 percentage point FMAP increase is:
Also, the President and Congress should increase the federal share of costs for the Affordable Care Act’s Medicaid expansion to low-income adults. (The House bill doesn’t boost the federal share of Medicaid costs for the expansion population.) The expansion covers over 4 million people age 50 to 64 as well as millions of people of all ages who have chronic health conditions — two groups at elevated risk for serious complications associated with COVID-19. State actions to restrict coverage for these groups would be highly destructive. Conversely, convincing more states to adopt the expansion would be among the highest-impact ways to cover more people (particularly those at highest risk for virus-related complications), prevent sharp increases in uninsured rates if people lose their jobs due to a downturn, and provide additional fiscal stimulus to help revive the economy.
|Preliminary, Rough Estimates of Increase in Federal Medicaid Funding From FMAP Increase Under House Bill|
|Assumes increase is in effect Jan. 1-Dec. 31, 2020|
|State||Additional federal Medicaid spending
|District of Columbia||160|
Source: CBPP analysis using most recent available Medicaid administrative spending data (2017) and Congressional Budget Office (CBO) baseline data
Note: The House bill would increase the base FMAP by 6.2 percentage points for all states, beginning on January 1, 2020, and continuing through the end of the quarter in which the Department of Health and Human Services-declared public health emergency ends. We inflate the 2017 total traditional (non-expansion-group) Medicaid spending to 2020 using the CBO’s Medicaid and Affordable Care Act baseline estimates. We assume the bill would increase the federal share of total traditional Medicaid spending by 6.2 percentage points in each state. We do not account for differences in the federal matching rate for various services in traditional Medicaid.