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Extension of the Enhanced Medicaid Match

NCSL Letter to Congress:  FMAP Extension and the Impact on States

Contents

May 6, 2010

The Honorable Harry Reid
Senate Majority Leader
United States Senate
Washington, D.C. 20510

The Honorable Mitch McConnell
Senate Minority Leader
United States Senate
Washington, D.C. 20510

The Honorable Nancy Pelosi
Speaker of the House
United States House of Representatives
Washington, D.C. 20515

The Honorable John Boehner
House Minority Leader
United States House of Representatives
Washington, D.C. 20515

RE:  Extension of the Enhanced Medicaid Match

Dear Senators Reid and McConnell, Speaker Pelosi and Representative Boehner:

The National Conference of State Legislatures again expresses its support for provisions that would extend the enhanced Medicaid match established in the American Recovery and Reinvestment Act (ARRA) for an additional six months to June 30, 2011. We further urge expeditious resolution of this issue that would provide funding certainty to states as FY 2011 budgets and appropriations bills are adopted.

The need for the extended Medicaid match assistance remains the same. Numbers of individuals continue to become Medicaid-eligible as a result of the recession. The Medicaid program remains a critical component of state efforts to provide assistance to individuals and families who have lost jobs and health insurance. While there are signs of economic recovery, it is far from robust enough to boost state revenues or to reduce levels of unemployment. Even with the ARRA enhanced match, overruns in state Medicaid programs continue to occur. States continue to address sizeable budget gaps that have compelled state lawmakers to make dramatic programmatic and revenue changes in order to ensure balanced general fund budgets.

Because the enhanced Medicaid match has been included in various pieces of legislation that have passed both houses, many states have assumed receipt of these funds in their FY 2011 budgets and appropriations measures. The attached survey shows what states have or have not assumed an extended enhanced Medicaid match and its potential impact on next year’s state budgets. Some states have not assumed the extension because they did not conduct sessions in 2010 or because they adopted biennial budgets last year. All states, nonetheless, would benefit from and have the procedural and fiscal tools necessary to utilize an extended Medicaid match.

If you have questions regarding this letter or the attached report, please contact Michael Bird (202) 624-8686; or Joy Johnson Wilson (202)-624-8689. Thank you for your consideration and we look forward to a continued dialogue on stabilizing and improving the Medicaid program.

Sincerely,

Senator Don Balfour, Georgia
President
National Conference of State Legislatures

Senator Richard Moore
President-elect
National Conference of State Legislatures

cc. Members of the United States Senate and the United States House of Representatives

 


FMAP Extension and the Impact on States

April 29, 2010

The ongoing congressional debate on Capitol Hill over whether to provide a six-month extension to the enhanced Federal Medical Assistance Percentages (FMAP) for states could have some major consequences on state budgets for the upcoming fiscal year. The $25.5 billion extension of provisions in the American Recovery and Reinvestment Act (ARRA) would cover the period between Jan. 1, 2011 and June 30, 2011, which represents the second half of fiscal year (FY) 2011 for nearly all states. Increasing demands that any “jobs,” supplemental appropriations or emergency legislation be offset with revenue adjustments or spending reductions has emerged as the dominant factor in potential passage of H.R. 4213, the FMAP extension bill, and related legislation.

As of Apr. 29, 2010, at least 29 states have finalized their budget plans for FY 2011. Most of the remaining states plan on adopting their FY 2011 budgets before June 30. 

This brief provides information on all 50 states. It is based on data collected from legislative fiscal directors in April 2010. It includes information on: 

  • Whether states have budgeted on the assumption that Congress will approve a six-month extension to the FMAP.
  • How much states have budgeted for the FMAP extension.

 Table 1 provides further details on state responses.

Budgeting for an FMAP Extension
Most states have budgeted for the upcoming fiscal year, FY 2011, on the assumption that Congress will approve a six-month extension to the enhanced FMAP. Thirty states reported that their budgets, either proposed or already enacted, assume Congressional approval of the six-month extension to the FMAP. 

In Kansas, the budget being considered by the House of Representatives assumes an enhanced FMAP extension while the Senate proposal does not. The North Carolina budget was adopted in 2009 but the governor’s recommended budget adjustments for the biennium are based on the assumption that the FMAP will be extended. 

Twenty states have not budgeted on the assumption that there will be an extension to the enhanced FMAP. Eight of these states adopted their biennial budgets during 2009 legislative sessions, well ahead of any discussion of a possible six-month extension: Indiana, Montana, Nebraska, North Dakota, Ohio, Oregon, Texas, and Wyoming.  

Amount Budgeted for FMAP Extension
States that included an FMAP extension in their budgets assumed amounts ranging from $33.7 million in New Hampshire to $1.5 billion in California. These are significant amounts in light of the projected budget gaps that most states have had to address for the upcoming fiscal year. Thirty-eight states and Puerto Rico recently reported that they were dealing with a cumulative projected budget gap of $89 billion for FY 2011.[1] 

Alabama reports that its FY 2011 budget assumes $197 million from an FMAP extension. Georgia’s soon-to- be-adopted budget assumes $370.5 million. In Illinois, the governor’s introduced budget assumes the proceeds will total $737 million. Michigan is assuming $514 million. And in Washington, it was presupposed from the beginning of the budget process that the FMAP would be extended; the $479.8 million that was allotted is 17 percent solution of the state’s $2.8 billion shortfall this biennium.



[1] More information on current state fiscal conditions can be found in NCSL’s report, State Budget Update: March 2010, which can be found at: http://www.ncsl.org/?tabid=20157

 

Table 1. Six-Month FMAP Extension

State

Has your state budgeted on the assumption that Congress will approve a six-month extension to the FMAP?

How much has your state budgeted for the FMAP extension?

Alabama

Yes. The FY 2011 budget assumes that the extension will be approved.

$197 million

Alaska

Yes.

$60 million

Arizona

No. Arizona's budget eliminated coverage for the KidsCare (SCHIP) program and reduced funding a portion of its Medicaid population in its FY 2011 budget prior to the signing of federal health care legislation. The Legislature is presently considering a bill to restore the reduced funding for the Medicaid population, contingent upon the extension of the enhanced FMAP.

$394 million: $9 million for restoration of KidsCare (occurring even if enhanced FMAP is not extended), and $385 million for restoring other T19 programs by six months.

Arkansas 

No.

N/A

California

Yes. The budget assumes a six- month extension of enhanced FMAP. It assumes a 61.59 percent federal to 38.41 percent state share for Medi-Cal costs.

About $1.5 billion.

Colorado

Yes. Colorado just passed its budget and included the FMAP extension to June 2011. The legislature decided to include this after the U.S. Senate passed the FMAP extension with 63 votes.

Approximately $245 million in federal funds would be lost.

Connecticut

Connecticut has not yet budgeted for next year but current assumptions include an extension of FMAP.

The FMAP portion alone is $263.5 million.

Delaware

No. Delaware’s FY 2011 budget does not assume that the ARRA FMAP will be extended past Dec. 31, 2010.

N/A

Florida

Yes.

$270 million

Georgia

Yes. The soon to be adopted budget assumes a six-month extension.

$370.5 million

Hawaii

Yes, although indirectly. Hawaii's Medicaid program is already running a shortfall that requires general funds. A portion of that shortfall was addressed under the assumption that additional federal reimbursements ($86 million) would be coming to the state to help address the shortfall.

$86 million

Idaho

Yes.

$68 million

Illinois

Yes. The governor's introduced budget assumed the proceeds from the enhanced FMAP extension.

$737 million

Indiana 

No. The biennial budget was prepared with the assumption the ARRA stimulus FMAP would end after December 2010.

 

Iowa 

Yes.

$115.9 million

Kansas

The House budget proposal assumes an enhanced FMAP extension while the Senate budget proposal does not.

The House budget proposal budgets for $130 million from the FMAP extension while the Senate version assumes zero funding.

Kentucky

Kentucky has not yet enacted a FY 2010-2012 budget. However, both the Senate and House budget proposals assume a six- month extension of FMAP.

$257 million

Louisiana 

No.

N/A

Maine

Yes. Maine recognized the savings from the enhanced FMAP, with a provision to curtail allotments statewide if it is not approved.

$85.5 million

Maryland

Yes.

$389 million

Massachusetts

Yes. The budget proposals being considered all assume a six-month extension of the FMAP.

$689 million

Michigan

Yes. Michigan is assuming $514 million of general fund savings from the six-month extension in the budget.

$514 million

Minnesota

The governor has included the FMAP extension in his budget recommendations. The House has assumed that revenue in its budget. The Senate has also planned for the extension. Minnesota has not yet completed its budget but the FMAP extension would be very helpful in the budget process.

Approximately $408 million

Mississippi

The Legislature passed the FY 2011 budget without the FMAP extension but the Legislature also passed HB 1059, which will allow a portion of the FMAP savings to be used if Congress extends FMAP past Dec. 31, 2010.

Current estimates are a savings to the State General Fund of $187 million.

Missouri 

Missouri is in conference between the House and Senate on the budget and it looks like Missouri is not going to budget the extension for FY 2011. The state is going to keep it for FY 2012.

 

Montana

No. Montana is not in a legislative session this year.

 

Nebraska

No.

 

Nevada

Although the funds have not been authorized in the legislatively approved budget, they have been included in the current plan to close the FY 2011 budget shortfall.

$88.5 million

New Hampshire

The 2011 supplemental budget negotiations have not been completed. On April 15, 2010, the governor submitted a plan to the legislature that does recognize a six-month extension of FMAP.

The governor's plan recognizes $33.7 million of additional FMAP money.

New Jersey

Yes.

About $490 million

New Mexico

Yes.

Approximately $150 million

New York

Yes.

$1.1 billion

North Carolina

The FY 2009-2011 budget, as passed during the 2009 legislative session, did not contemplate an FMAP extension. The legislature will convene in mid-May and will begin considering adjustments to the FY 2009-11 budget at that time. The legislature may or may not include a six-month FMAP extension. However, the governor has released her recommended budget adjustments for FY 2009-11, and her recommendations are based on the assumption that FMAP will be extended.

The governor's budget assumes $499 million for the FMAP extension.

North Dakota

No. The North Dakota Legislative Assembly meets each odd-numbered year; therefore, when the North Dakota Legislative met in 2009, it was not aware of a possible extension of the enhanced FMAP and budgeted assuming the enhancement would not be extended.

 

Ohio

No. Ohio does biennial budgeting; the FY 2011 budget was enacted in July 2009.

N/A

Oklahoma

The Legislature currently is in the process of developing the budget, but is considering the option of including the assumption of the extension.

 

Oregon

No. It has not been included in the budget for the 2009-2011 biennium (July 2009 through June 2011).

 

Pennsylvania

Yes. The FY 2011 budget currently under consideration has assumed an extension of the ARRA FMAP on qualified expenditures.

$848.5 million

Rhode Island

Yes.

$95.2 million

South Carolina

Yes. The House-passed budget and the Senate Finance Committee have budgeted the additional six-month FMAP extension.

$230 million

South Dakota

Yes, but the FY 2011 budget was balanced without the six-month extension.

$36 million

Tennessee

No.

None.

Texas

Texas is facing a likely supplemental appropriations need for Medicaid in FY 2011. The state is hoping funds from an extension of FMAP would partially offset that spending need so that it would have more state funds available for the 2012-2013 biennium where it faces a shortfall greater than $11 billion.

The state is hoping for about $900 million in additional federal funds.

Utah

Not explicitly. However, the state funded only half of the projected Medicaid caseload projections for FY 2011. Some have postulated that the second half would be covered by the six-month FMAP extension.

$40 million

Vermont

Yes. At this point the state has budgeted on the assumption of a six-month extension.

$62.8 million

Virginia

No. Virginia made general fund budget cuts totaling $417 million for the FY 2010-12 budget (July 1, 2010 - June 30, 2012). Language was added that would restore proposed funding reductions if six months of additional FMAP is provided.

 

Washington

Yes. The assumption that FMAP would be extended was fully integrated into all budget steps and the overall decision-making process. The budget was adopted April 12, 2010. In addition to the FMAP assumption, the legislature also increased revenues, transferred dedicated fund sources into the state general fund, utilized the budget stabilization account, assumed savings from federal health reform and made numerous program reductions in addition to imposing mandatory employee furloughs.

$479.8 million (Solved about 17 percent of the state’s $2.8 billion budget shortfall.)

West Virginia

No. West Virginia has been very conservative in budgeting for the state match with a secondary goal of building a surplus for the out years when it anticipates a "funding cliff" scenario.

Not applicable.

Wisconsin

Wisconsin operates on a two-year budget cycle. The 2009 Wisconsin Act 28, enacted in June 2009, established a Medicaid budget for state fiscal years 2009-10 and 2010-11 (the period July 1, 2009 through June 30, 2011) that did not assume the period of enhanced FMAP would be extended past Dec. 31, 2010. However, Medicaid caseloads and costs are significantly exceeding the Act 28 estimates, so that the FMAP extension would significantly help the state fund these higher-than-budgeted costs.

N/A

Wyoming

No.

N/A

 

 

 

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