On Feb. 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, (the “stimulus bill”). The $787 billion piece of legislation provides tax breaks to individuals and businesses, expands spending for unemployment and food stamp benefits, and invests heavily in construction and other infrastructure projects.
The bill also will provide substantial help for state Medicaid programs, including a 6.2 percentage increase in every state’s federal medical assistance percentage (“FMAP,” the federal reimbursement rate for state Medicaid spending). States with higher unemployment rates will be eligible for greater increases. Crucially, states are only eligible for an FMAP increase if their eligibility standards are no more restrictive than the standards they had in place on July 1, 2008. States that have reduced their eligibility standards since then will be eligible for the increased FMAP if they return to their former standards. For example, a state that has reduced its income limit for a Medicaid population since July 1, 2008 will not be eligible for an FMAP increase unless the state restores the income limit that was in effect on July 1, 2008. It is important to note, however, that state Medicaid cuts in services will not impact a state’s eligibility for the assistance.
Other Medicaid provisions include the extension of the Qualified Individual Program through December 31, 2010 (this program assists certain low-income individuals with their Medicare Part B premiums), and a temporary increase in Disproportionate Share Hospital Payments. The bill would also extend moratoria on Medicaid regulations for targeted case management services, provider taxes, and school-based administration and transportation services through June 30, 2009.
A more detailed breakdown of the stimulus bill’s provisions relating to Medicaid, Medicare and Social Security will be forthcoming.
