The Senate is working on legislation that would extend the federal increase in Medicaid assistance that states are receiving from the American Recovery and Reinvestment Act (ARRA) through June 2011.
Sens. Harry Reid (D-Nev.) and Jay Rockefeller (D-W.V.) introduced legislation on Feb. 4 that would extend the Federal Medical Assistance Percentage to support state programs for six months. Without Congressional intervention, the funding increase will end Dec. 31.
The funding would be used to bolster budgets in states struggling with a low tax base due to the recession and help states provide Medicaid coverage to a burgeoning number of enrollees.
"We absolutely need this six months of relief while we weather this economic storm – too many families depend on this program for us to allow a shortfall of funding," said Rockefeller, chairman of the Senate Finance Subcommittee on Health Care.
The bill is currently before the Senate Finance Committee.
Under ARRA, each state received a general 6.2 percent increase in its FMAP, and certain states with relatively high unemployment rates received additional funding based on quarterly unemployment statistics, according to the Centers for Medicare and Medicaid Services.
Some 51 million people who would otherwise not have access to regular healthcare rely on Medicaid. The amount of FMAP granted to each state is based upon the state's relative wealth, with funding percentages ranging from a minimum of 50 percent of costs to as high as 83 percent. Funding is adjusted incrementally each year based on economic changes in the states, but Congress can increase funding across the board at any time.
The ARRA funding for FMAP was retroactively used to supplement state FMAP payments beginning Oct. 1, 2008. The White House estimated the ARRA money to increase FMAP would total $15 billion for the first part of 2009 alone.
The National Association of Chain Drug Stores sent a letter Wednesday to Rockefeller supporting provisions in the bill that "would remedy the much-maligned accreditation requirement for pharmacies providing durable medical equipment (DME) through Medicare."
"Extending the current FMAP increase means states are less likely to cut their Medicaid program benefits and jeopardize the ability of our most vulnerable patients to stay on their medication therapies," said NACDS President and CEO Steven Anderson.
In a Sept. 23, 2009 report issued by the Government Accountability Office, 16 states and the District of Columbia reported that Medicaid FMAP grant awards from ARRA helped them increase caseloads, maintain current benefits and eligibility levels and free up state funding for other needs.