Enhanced Medicaid funding is essential during an economic downturn

Medicaid is a critical source of health coverage and an important safety net for the 1 in 5 low-income individuals the program covers. By providing access to care for so many Americans, Medicaid plays a vital role in helping enrollees prevent and manage chronic conditions including chronic kidney disease and its leading causes, diabetes and high blood pressure. 

The program is particularly essential during an economic downturn, and the COVID-19 pandemic and economic fallout it caused has made that clear. More than 44 million Americans have lost their jobs, and many of them also lost their employer-sponsored health insurance. As more people turn to Medicaid to provide health coverage and financial stability, Congress should enhance funding for the program to ensure Americans have access to it during times of great need.

Medicaid is administered by states but is jointly financed by the federal government and state governments. Because of the pandemic, high unemployment numbers, less state revenue and increased enrollment in safety net programs like Medicaid, states are facing huge budget shortfalls. Unlike the federal government, states generally need to balance their budgets. State leaders are now facing the prospect of having to make significant cuts to their Medicaid programs even though it would mean many people would lose access to health care.

The federal share of the cost of Medicaid services in each state is determined by the Federal Medical Assistance Percentage (FMAP). In response to the COVID-19 pandemic, Congress passed, and the President signed into law, a temporary 6.2% increase in states’ FMAP back in March. However, the ongoing crisis demonstrates that amount was not enough, and it is looking likely that states will be unable to avoid harmful cuts to their Medicaid budgets.

The American Kidney Fund (AKF) joined other organizations representing providers, patients, workers and insurers to ask Congress to enhance FMAP by at least 12 percentage points, with additional support for those states hardest hit by the economic effects of the pandemic. We encouraged Congress to extend this increase until the economic recovery for states is secure and stable. By enhancing federal financing for the Medicaid program, it will protect health care access for millions of Americans, especially during this time when it is needed most.

We also voiced our support for S. 4108, the Coronavirus Medicaid Response Act, a bill introduced in the Senate on June 30 by Sen. Bob Casey (D-PA). The legislation would increase federal support to state Medicaid programs during economic downturns and link FMAP adjustments to state unemployment levels. Federal support during an economic crisis would be more responsive, and because economic relief would adjust automatically based on states’ needs, states would not have to rely on Congress to pass a new FMAP increase every time there is a downturn.

You can ask your senators and representative to support S. 4108, the Coronavirus Medicaid Response Act, by taking just two minutes to send them a message through our website. Your voice matters!


About the Author

Mike Ly

Mike Ly is the director of public policy at the American Kidney Fund.