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Support Increase in Federal Medicaid Funding

VOR Action Alert

Table of Contents

1. Congress to consider temporary increase in Medicaid spending
2. Action Alert: Calls to Senators Needed Immediately
3. Voice of the Retarded Supports a Temporary Increase in Federal Medicaid Spending
4. National Governor's Association position
5. Link to legislation

1. Congress to consider temporary increase in Medicaid spending

The Senate Finance Committee recently passed its version of the bill, which includes a provision that calls for a temporary increase in federal Medicaid spending (details follow). The full Senate is now in the process of debating the entire bill. The House passed version does NOT include a provision to increase Medicaid. Partisan debates have threatened to stall the whole process; a bipartisan alternative bill is in the works. Development of the bipartisan bill will involve key members of the House, Senate and Administration.

Of particular interest to VOR advocates is the provision that appears in the State Stimulus section of the Act. This provision calls for the following:

(1) a 1.5% increase in the federal Medicaid match for all states for FY 2002. States will not be required to increase their contributions, so it is essentially "free" federal money;

(2) an additional 1.5% increase in the federal Medicaid match for states that have experienced "higher than average" unemployment rates in the three months before September 11. These states will receive a total of 3% increase; and

(3) 29 states that expected their federal matching rate to be reduced will enjoy a one-year reprieve from the cut. These states were scheduled for a cut because their per capita income increased and the Medicaid match is based on a formula that gives more to poorer states. The 29 states are: AK, AZ, AR, FL, GA, KY, LA, MN, MS, MT, NE, NV, NM, NC, ND, OH, OK, OR, RI, SC, SD, TN, TX, UT, VA, WA, WV, WI, and WY.

VOR supports the Senate's efforts to seek a temporary increase in Medicaid spending. VOR's call for action and position paper are shared below.

2. Action Alert: Calls to Senators Needed Immediately

As the Senate struggles to secure agreement on its version of the economic stimulus package, and lawmakers work to develop an alternative, bipartisan, proposal, it is vital that the proposal for a temporary increase in Medicaid spending remain on the radar screen and become part of the passed version.

WHO

Members of the Senate, especially Republican members.

[Note: After making your calls to the Senate, you may also want to share VOR's position with your Governor and other policymakers].

WHERE

If calling on Friday, November 16, call the Capitol Switchboard at 202-224-3121. Calls will be forwarded, even in cases where regular offices have been relocated.

If calling next week, you are encouraged to reach the District offices of your Senators. Contact numbers can be accessed by visiting http://www.vor.net (bottom of home page), or at http://congress.org.

Although a call, given the timing and the uncertaintly of the actual location of some offices, is far more preferable, you may compliment your call with a fax or e-mail. Contact information for D.C. and District Offices can be accessed at http://www.vor.net (bottom of home page), or at http://congress.org. A written VOR position paper is shared below.

WHEN

Time is of the essence. The Senate will be debating this issue tomorrow (Friday, November 16). You are highly encouraged to call tomorrow with the message shared below. You can also reach the Senate District Offices next week.

WHAT

Here is the message you can use:

"I support the provision in the Senate version of the economic stimulus package to temporarily increase federal Medicaid spending during Fiscal Year 2002. I am a member of Voice of the Retarded and we feel this provision will help ensure that Americans with mental retardation do not suffer from devastating Medicaid program cuts in the coming year."

3. Voice of the Retarded Supports a Temporary Increase in Federal Medicaid Spending

November 2001

Voice of the Retarded Supports a Temporary Increase in Federal Medicaid Spending

Voice of the Retarded (VOR) is pleased to support efforts to temporarily increase federal Medicaid spending to help ensure that States are able to maintain important residential and health care programs on behalf of people with disabilities, the elderly, and other Americans.

States are struggling to accommodate Medicaid shortfalls that were present even before the September 11 tragedy. Since then, the situation has only worsened. As the economy weakens and the tax base in most states erodes, budgets suffer and demand increases. People with disabilities, including people with mental retardation, stand to suffer the most if access to residential, health care and other services is cut. For people with chronic health care conditions accessing uninterrupted services is often a matter of life or death.

A provision within the Senate version of the Economic Recovery and Assistance for American Workers Act of 2001 aims to provide a temporary solution to this temporary crisis. This provision would offer a one-time increase of 1.5% in the federal Medicaid matching funds ("FMAP") provided to all fifty states in Fiscal Year 2002. States with higher than average unemployment rates in the three months leading up to the September 11 attacks would receive an additional 1.5% increase, bringing their total rate increase to 3%. In addition, 29 states that were slated for matching rate decreases would receive a one year reprieve from the planned cuts.

It is vital that Americans with disabilities, including people with mental retardation, not be left behind in the ongoing plans to stimulate the nation's economy. The proposal to temporarily increase federal Medicaid spending offers some level of security for our nation's most vulnerable citizens. VOR does ask that any increase in Medicaid spending result in direct support to the people in need, rather than administrative costs.

VOR is pleased to join the National Governor's Association, and other national organizations, in its support for a temporary increase in federal Medicaid funding as an important component of the overall effort to stimulate the economy.

END

Voice of the Retarded is a national organization advocating on behalf of individuals with mental retardation and their families. VOR is the only national organization advocating for a full range of residential and support options for people with mental retardation, including Medicaid-certified Intermediate Care Facilities for the Mentally Retarded (ICFs/MR) and home and community-based care.

4. National Governor's Association position

Washington, D.C.--The National Governors Association (NGA) today voiced its support for an economic stimulus option that would provide more federal funding for Medicaid, saying it would both stimulate the economy and shore up the safety net for low-income families.

The plan is a temporary increase in the federal share of the Medicaid program - federal medical assistance percentage (FMAP) - that would provide an immediate boost to the economy.

During the past several months, governors have watched state revenues decline while Medicaid costs soar, forcing drastic cuts in state budgets across the country. Complicating the matter, the federal government's share of financing for the Medicaid program is scheduled to decrease in 29 states during the current fiscal year. There also is increasing concern about state budget pressures in the aftermath of the Sept. 11 attacks as states scramble to implement costly homeland security measures and provide social services, mostly for Medicaid and welfare recipients.

According to the National Association of State Budget Officers (NASBO), states face a current shortfall of $15 billion. The NASBO analysis shows that every region has been impacted. Some state budget shortfall estimates are coming in as high as $3 billion. Examples include: New York and California, $3 billion; Ohio, $1.5 billion; and Massachusetts, $1.1 billion. Other states facing serious budget problems include Kentucky, which has a $429 million gap, and Illinois estimates a $450 million shortfall.

NGA Executive Director Raymond C. Scheppach said if unemployment increases to 6.0 percent to 6.5 percent, state budget shortfalls could rise to $20 billion to $30 billion. A recent NGA analysis conducted with economy.com indicated that unemployment in this range is likely over the next year, even if the economy rebounds.

NGA officials also point out that nearly all states are required to balance their budgets under state laws or constitutions. But significantly declining revenues, coupled with job loss and an increased demand for services, will leave states with no choice but to cut spending or to raise taxes.

"The revenue picture in states was bleak before Sept. 11 with skyrocketing Medicaid costs and the economic downturn forcing governors around the country to cut their budgets. Now governors are looking at unanticipated costs associated with homeland security, such as protecting our borders, nuclear power plants, national parks, pipelines and water treatment facilities. Many states are looking at a second round of cuts to try and pay for it all. States need help and increasing the federal share for Medicaid would be a way to put desperately needed funds where governors need them the most - providing health care to poor families," said NGA Chairman Michigan Governor John Engler.

Scheppach said a recent study by the Urban Institute was consistent with the economy.com data. Their study estimated that at 6.5 percent unemployment, Medicaid rolls will increase by 800,000 adults, 2 million children and 260,000 disabled persons.

"If the economy does not turn around quickly, it is possible for unemployment to reach as high as 7.0 percent or 8.0 percent as a worst-case scenario. Regardless of where the unemployment numbers bottom out, previously employed individuals will be coming back on the Medicaid rolls because they will lose their jobs and their health care benefits," said Scheppach.

"States cannot provide services for new people coming on to the Medicaid rolls in their current financial situation. It is as simple as that. At a time when states have been asked to assume an unprecedented role in our national security efforts, we are also dealing with declining state revenues that have gotten worse since September 11. If Congress is serious about a stimulus package they need to help the states. A temporary increase in the federal share for Medicaid is the right step to take now," said NGA Vice Chairman Kentucky Governor Paul E. Patton.

Both Engler and Patton said all governors will be contacting their congressional delegations this week to urge them to support the FMAP stimulus proposal. Action on a stimulus package is expected to occur before Congress adjourns.

For more information about FMAP and how an FMAP increase would help each state, NGA's other proposals for an economic stimulus package, or details about state budgets, please call 202/624-5334 or visit the website.

NGA, founded in 1908, is the instrument through which the nation's governors collectively influence the development and implementation of national policy and apply creative leadership to state issues.

5. Link to legislation

VOR * 836 S. Arlington Heights Rd., #351 * Elk Grove Village, Illinois * 60007

877-399-4VOR ph. * 847-253-0675 fax * tamie327@hotmail.com