Congressional inaction may cost states up to $24 billion in additional Medicaid funding.

The future of the Federal Medical Assistance Percentages (FMAP) increase remains in doubt, despite pleas from governors, state legislators, AARP, and the 64-member Leadership Council of Aging Organizations, of which PHI is a member.

In June, the House dropped an FMAP increase extension from legislation that would prolong certain tax provisions and unemployment benefits.

Later that month, Senate Republicans defeated a severely scaled-down version of the FMAP extension that had been written into the Senate’s legislation extending jobless benefits.

Origins of the FMAP Extension

As part of the American Recovery and Reinvestment Act, Congress authorized a temporary increase in the rate at which the federal government matches state funding for various social programs, including Medicaid. This rate is known as FMAP.

The temporary FMAP increase was originally scheduled to last through the end of 2010. However, many governors have requested an extension in order to bring relief to their cash-strapped states.

In their FY2011 budgets, approximately 30 states have assumed that the enhanced FMAP rates will be extended through the entire fiscal year, which ends next June 30.

Inaction Would Harm States

If the FMAP increase is not extended through the end of the 2011 fiscal year, states will be forced to reconcile roughly $24 billion in missing Medicaid funding.

Analysis from the Center for Budget and Policy Priorities shows exactly how each state will be affected if Congress fails to extend the FMAP increase.

“Without continued federal support, long-term care services could be seriously jeopardized,” said Carol Regan, PHI government affairs director. “Elders and people with disabilities could go without services, workers could face reduced hours and income, and family members will be forced to make even greater sacrifices to care for their loved ones.”

Medicaid currently pays for half of all long-term care spending in the country, costing over $100 billion annually.

Organizations Speak Out

Numerous organizations have urged Congress to extend the enhanced FMAP rates through June 30, 2011.

On July 21, the Leadership Council of Aging Organizations sent a letter (pdf) to Senate Majority Leader Harry Reid (D-NV) asking the Senate to approve the FMAP extension “without delay.”

Additionally, the American Health Care Association and the National Center for Assisted Living have teamed up to launch “Driving for Quality Care,” an RV tour through 40 states intended to drum up support for FMAP extension.

– by Matthew Ozga