Academy Urges Congress to Extend Medicaid Payment Increase

Federal Medical Assistance Percentage Must Rise to Meet COVID-19 Challenge, Groups Say

June 04, 2020 12:32 pm News Staff

The well-being of Americans roiled by COVID-19 depends on the extension of a crucial Medicaid boost, the Academy and 19 other organizations told congressional leaders in a June 2 letter.(2 page PDF)

[medicaid cuts ahead sign]

"To protect health care access for over 70 million Americans, we call on Congress to enhance federal financing for the Medicaid program by at least 12 percentage points, with additional support for those states hardest hit by the economic shockwaves," the groups wrote, referring to the Federal Medical Assistance Percentage, the factor by which the federal government sets matching funds given to states for certain medical and social services.

The letter was sent to House Speaker Nancy Pelosi, D-Calif.; House Minority Leader Kevin McCarthy, R-Calif.; Senate Majority Leader Mitch McConnell, R-Ky.; and Senate Minority Leader Charles Schumer, D-N.Y.

Among the co-signatories were the AMA, the American Cancer Society Cancer Action Network, the Association of American Medical Colleges and the National Association of Community Health Centers.

March's Families First Coronavirus Response Act(www.congress.gov) included a temporary 6.2% increase to the FMAP(www.medicaid.gov) -- "a positive first step," the letter said.

"But it is increasingly clear that it will not be sufficient to avoid significant budget cuts during a time when Medicaid is vitally important to COVID-19 response."

That caution echoed a Brookings Institution analysis,(www.brookings.edu) published in late March, that said the short-term boost was "not nearly large enough to prevent states and localities from having to cut spending."

In April, the AAFP called for a 5.8% increase to the FMAP on top of the one already mandated, for a total increase of 12%.

It's a strategy that has worked before(www.kff.org) during times of recession. But no such recent downturn has looked like the one wrought by COVID-19.

As of late May, unemployment numbers continued to surge,(www.usatoday.com) raising the number of uninsured Americans while efforts to flatten the curve of the pandemic remained in flux.(khn.org)

"States are being pushed to the brink," the letter said. "Based on Congressional Budget Office and Wall Street forecasts, states will likely face shortfalls of approximately $650 billion in the next three years.

"These cuts come at a time when Medicaid is more essential than ever for millions of Americans who find themselves without a job, without any income, and now without health care coverage," the Academy and its co-signatories added.

The FMAP increase, they said, "should be extended until states' economic recovery is secure and stable."

"Unlike other types of relief to states, an increase in the FMAP will automatically adjust based on costs states are facing, providing more funding if a deeper-than-expected recession causes more people to enroll or COVID-19 costs are especially high."

Raising the FMAP, the letter concluded, is "a commonsense response that is timely, targeted and temporary, and will help get America back on its feet again."