In an effort to address the impact of the dramatic economic downturn in the wake of the COVID-19 crisis, President Donald Trump and Congress worked together to enact the bipartisan Families First Act. Through this legislation, policymakers provided a temporary 6.2 percentage point increase to what’s known as the Federal Medical Assistance Percentage, which is the share of Medicaid costs that the federal government pays in each state. This is an important first step, but is not sufficient as COVID-19 rages on and wreaks havoc on state economies nationwide.
State budgets, including California’s, are facing a disastrous trifecta of threats as a result of COVID-19: lost tax revenue, significant increases in unemployment claims as well as increased enrollment in Medi-Cal, which is what California’s Medicaid program is called. State budget shortfalls across the country could reach $765 billion over the next three years – far in excess of what they faced even during the Great Recession of a decade ago.
Governors nationwide, including Gov. Gavin Newsom, are calling on the federal government for more help to avoid painful cuts to vital public services to meet their balanced budget requirements. The president and Congress need to increase FMAP by at least 12 percentage points, and raise it even more for states that are hit the hardest by the economic downturn.
Any reduction in Medi-Cal spending would only further exacerbate the health disparities that are far too common across the United States. For people with and at-risk for kidney disease – which, like many chronic diseases, disproportionately affects minorities – a robust Medi-Cal program is essential to ensure they receive the health care needed to prevent or slow the progression of kidney disease. Of the more than 12 million people in California covered by Medi-Cal — which is growing by the day due to the economic downturn — nearly two-thirds are minorities.
California has taken several steps in response to the challenges of COVID-19, including expanding telehealth, making it easier to enroll for Medi-Cal benefits and increasing provider payments. Because right now, it is critical that we provide equitable access to high-quality medical care for those who need it most. But without fiscal relief from Washington, California will be forced to make severe cuts to these benefits.
The worst state budget crisis in modern history is further complicated by the dramatic increase in Medicaid enrollment. According to the Urban Institute, at a 15 percent unemployment rate, which is swiftly becoming likely, 8 million more people become eligible for Medicaid enrollment which includes children eligible for the Children’s Health Insurance Program. At a 20 percent percent unemployment rate, there is a projected additional 12 million people who would become eligible for Medicaid, again including CHIP. Access to Medicaid for many will indeed be jeopardized without an enhanced FMAP.
California and other states should not be forced to put safety net programs like Medicaid on the chopping block when these programs were designed for times such as these. We cannot pay for budget shortfalls on the backs of those who lost their job because of a health pandemic and need healthcare. These are families with children, seniors and people with disabilities who are already hurting most.
To prevent this we need additional action by federal policymakers to cover an even larger share of Medicaid costs. While the initial FMAP increase of 6.2 percent in the Families First Coronavirus Response Act helped states to address the growing number of citizens now relying on Medicaid, it is far less than what the states currently need.
That’s why the American Kidney Fund, among other organizations who strive to ensure at-risk and high-need patients have access to care, is calling on the president and Congress to raise the FMAP by at least 12 percentage points, and to raise it even more for states that are hit the hardest by the economic downturn. Policymakers should maintain this increase until states’ economic recovery is secure and stable. A strong and effective Medicaid program is critical to maintaining the health of tens of millions of people. Increasing the FMAP is vital to ensuring that they continue to receive the medical care and services they need.
LaVarne Burton is the president and chief executive officer of the American Kidney Fund.