Partnership Leads Efforts to Increase Medicaid Matching Rate

The Partnership for Medicaid, a nationwide coalition dedicated to preserving and improving Medicaid, has called on Congress to temporarily increase the federal Medicaid matching rate for states and localities as part of an economic stimulus package now under consideration by federal lawmakers. The AAFP is a founding member of the coalition.

President Bush and House leaders agreed on a stimulus package in late January, and the Senate is working on passing its version of a stimulus package.

Although the House and Senate bills currently do not contain an increase in the matching rate, also known as the Federal Medical Assistance Percentages, or FMAP, Congress could pass an increase in the rate as part of a final stimulus package, according to the Partnership for Medicaid.

The partnership, which includes a variety of professional, health care and advocacy organizations, sent a letter (2-page PDF; About PDFs) to each member of Congress on Jan. 25, saying that "increasing the FMAP is an effective means of stimulating state economies."

"It would target federal spending at the lowest income individuals and contribute to state economies, particularly the health care sector," said the letter.

Licy Do Canto, chair of the Partnership for Medicaid and assistant director of federal affairs for the National Association of Community Health Centers Inc., said, "Medicaid is a program that is making a huge difference." With the letter, he added, the partnership "wants to make sure it continues to do that, and we felt very strongly that at a time when the economy is ailing and so many people are impacted by that, Congress should increase the (match) rate."

The federal government matches state Medicaid funding based on a dollar percentage determined by the FMAP. The matching rate is at least 50 percent of every dollar spent in each state and is greater in poorer states, climbing as high as 77 percent in some of the poorest states.

"During economic downturns and periods of increased unemployment, more people rely on Medicaid," said the letter. "Yet under the program's financing mechanism, Medicaid is most vulnerable to funding shortfalls when circumstances create the greatest need."

The coalition's letter said Congress should increase the match rate, and it should also address the Bush administration's rule-making activities, which are designed to limit the growth of Medicaid programs on the state level. These actions would "go a long way to shoring up state Medicaid programs during the economic slowdown and ensuring that Medicaid beneficiaries continue to receive the coverage they need," said the letter.