Congress bolsters Medicaid with FMAP extension amid partisan battle

Despite a bitter partisan battle over federal spending, Congress has passed a six-month $16.1 billion extension to federal matching funds for Medicaid.

The funding aims to bolters state coffers following the expiration of a $90 billion boost to Federal Medical Assistance Percentage (FMAP) payments provided in 2009 under the stimulus package. The new extension will extend the help to states through June 2011, causing a collecting sigh of relief for state Medicaid directors.

“Over the short term, Congress could not have done anything more important to stabilize long-term services and supports, reinforce the caregivers that deliver them, and keep the economic recovery on the right path than the Medicaid decision," said Larry Minnix, president and CEO of the American Association of Homes and Services for the Aging.

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The FMAP extension was passed in August as part of H.R. 1586, an amendment to the Teacher Jobs and State Fiscal Relief bill. The will provide a phased-down enhanced federal match that would provide an additional 3.1 percent beginning the first calendar quarter of FY2011, then dropping to 1.2 percent in the second calendar quarter.

According to a survey conducted last spring by the National Conference of State Legislatures (NCSL), 30 states reported that their budgets, either proposed or already enacted, assumed Congressional approval of the six-month extension to the FMAP.

Only nine states out of the 30 had budget contingencies in place should Congress not approve the extension. The contingency plans included eliminating Medicaid benefits or depleting state reserves, the survey said. NCSL and the National Governors Association have been pressing all year for Congress to pass an extension.

Senate Republicans opposed the bill – with the exception of Maine Sens. Olympia J. Snowe and Susan Collins, who provided the Republican votes needed to achieve a super-majority to pass the legislation.

“We understand that, as our national and state economies continue to struggle, a further extension of the enhanced FMAP is necessary to help states protect against further job losses as the economy slowly turns around,” they said in a joint statement.

Collins and Snowe said they voted for the bill because it was offset and “would not contribute to skyrocketing national debt.”

Senate Republican Leader Mitch McConnell called the bill, “just the kind of bloated, slapdash affair Americans have come to expect and to loathe from Democrats in Washington.”

“The purpose of this bill is clear: It’s to create a permanent need for future state bailouts, at a time when we can least afford it,” he said.