Controversy erupts: Will some states benefit more than others?
Controversy erupts: Will some states benefit more than others?
The recently passed stimulus package will channel about $87 billion to state Medicaid programs, and predictably, controversy has erupted over which states are getting the most aid.
Some critics say the Federal Medicaid Assistance Percentages (FMAP) formula being used doesn't deal fairly with the fact that some states have much bigger Medicaid- eligible populations than others. To calculate the percentage of federal matching money that states will receive, the formula uses an average of the last three years of per capita income, which may change dramatically during a recession. The stimulus would tweak this formula temporarily to address this, with each state's Medicaid match increased by 6.2% until the end of 2010. For states with high unemployment, more Medicaid funds will be given than with the traditional FMAP formula.
However, some high-unemployment states also may have relatively large Medicaid benefit outlays, as compared with lower-income states. Some say the formula used by the stimulus is biased toward the bigger-spending Medicaid states.
"There was some debate within Congress about the merits of targeting some of the relief to the states with the largest unemployment rate increases, which are correlated with economic distress," says Edwin Park, a senior fellow at the Center on Budget and Policy Priorities. "The Senate wanted only 20% of the relief targeted in that manner, while the House wanted 50%. They split the difference at 35%."
Although an analysis has been done by the General Accounting Office to estimate how much each state stands to gain in new Medicaid benefits as a result of the new FMAP formula, it's not yet possible to tell exactly how much each state will ultimately receive, as this will be based on unemployment rates through the end of 2010.
"We believe that targeting the relief ensures that the states which need assistance get it," says Mr. Park. "Thus, it makes sure that the FMAP increase is more stimulative by averting budget cuts that would further deepen the recession."
The recently passed stimulus package will channel about $87 billion to state Medicaid programs, and predictably, controversy has erupted over which states are getting the most aid.Subscribe Now for Access
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