$26 Billion FMAP Extension Bill Signed into Law
August 12, 2010
On Tuesday, August 11, President Obama signed into law a bill (HR 1586) passed earlier by the House that includes a six-month extension through June 2011 of Medicaid's Federal Medical Assistance Percentage (FMAP) for the states. The temporary enhanced FMAP increase was introduced last year to help financially strapped states pay for additional Medicaid coverage under the economic stimulus package.
The cost of the bill is $26 billion, with $16 billion of that going to help states address growing Medicaid budget deficits. Another $10 billion was aimed at providing educational assistance in the states. The Congressional Budget Office said that the FMAP extension will reduce the deficit by $1.4 billion.
It has been stated that these funds will provide critical relief to states that are struggling to ensure access to care for low-income families and individuals. However, it is important to note that while we are very pleased with the extension, it is a good deal less than anticipated by the states. States will still have to make budgetary cuts.
The House returned in the midst of its five-week recess to vote for the measure 247 to 161. FMAP runs through Dec. 31 of this year, but many states had been calling for an extension since earlier this year in order to coincide with their state budget planning efforts. To date, 30 states included the anticipated FMAP extension when passing their state budgets.
The bill approved by the House on Tuesday scaled back the FMAP increase from the initial 6.2% for six months to 3.2% for the first quarter (January 2011 through March 2011) and 1.2% for the second quarter (April 2011 through June 2011). Those states with high unemployment will continue to receive additional percentage points in funding during the six-month extension.
As states begin to rebalance their budgets, we will advise you of where anticipated cuts are projected to better help you plan for your own budgets.
