In 2002 and 2003 I was going all around the state explaining the arcane acronym “FMAP – Federal Medical Assistance Percentage.” Hopefully, that time will come again.
FMAP is the percent of state medicaid expenditures that the federal government reimburses to states. It’s based on a sliding scale, with the richer states, like Massachusetts, getting the minimum reimbursement, 50%. So for us, every dollar we spend on Medicaid, the federal government pays us back 50 cents. (Another awful acronym: the federal reimbursement is called FFP, for “Federal Financial Participation.”) States like West Virgina and and Mississippi get around 75 cents back (chart here).
In 2003, as part of an economic stimulus program, Congress bumped up the rate for all states to ease pressure on state budgets and help the economy. For Massachusetts, the increase was worth over $300 million. One of the conditions for getting the extra money was that states could not cut back on their Medicaid eligibility rules. This kept states from cutting Medicaid during the economic downturn.
Helping state governments is seen as a quick and efficient way to preserve employment and keep vital services from being cut at time when the population needs help.
Now Washington is planning for the possibility of a lame-duck Congressional session, soon after the election, to pass another round of economic stimulus measures. AP and the NYTimes report that the bill may include an FMAP increase.
Republicans are already questioning the idea. House Republican Whip Roy Blunt (R-Mo.) said Congress shouldn’t be “bailing out states who spent a lot more money than they should have on Medicaid and other social programs.”
The House passed a stimulus bill in late September that included an FMAP increase, but that bill died when the Senate would not attach it to the financial bail-out. News that another attempt will be made soon is good news for Massachusetts’ health reform progress.