The bill, which is enthusiastically endorsed by the National Governors Association (NGA), would increase the federal government's share of each state's Medicaid costs and provide block grants to states to assist vulnerable populations. Senator Collins offered her amendment with Senators Jay Rockefeller (D-WV), Ben Nelson (D-DE), and Gordon Smith (R-OR), and a number of her Senate colleagues.
"The unexpected nature and the severity of the financial crisis states now face has convinced me that we need to help," said Senator Collins, "and we should do so by targeting resources where they are most needed – for health care and social services."
The amendment provides about $9 billion in total fiscal relief to the states under a reasonable bipartisan approach that would include:
• Temporary Increase in Federal Medicaid Matching Rates. The amendment would provide about $6 billion to states through an increase in the Federal Medical Assistance Percentage (FMAP). The FMAP increase would have two components which would be effective for 18 months.
Any state whose FMAP is lower than the FMAP for the prior fiscal year would be able to retain the higher rate. The provision would be effective for the second half of fiscal year 2002 and all of fiscal year 2003 (i.e., April 2002 to September 2003).
All states' FMAP would be increased by 1.35 percentage points. The provision would be effective for the second half of fiscal year 2002 and all of fiscal year 2003 (April 2002 to September 2003). States would be eligible for this increase only if they maintain Medicaid eligibility levels effective as of January 1, 2002. States that reinstate eligibility cuts made after January 1, 2002 but before enactment of this amendment would qualify for the increase in the first fiscal year quarter the cuts are restored. This eligibility provision would in no manner affect states' flexibility with regard to benefits or other aspects of their Medicaid programs.
• Temporary State Fiscal Relief Grants. The amendment would provide $3 billion to states in fiscal relief grants through Title XX that could be flexibly used for a variety of social services programs. The grants would be available to the states through September 30, 2004 and would constitute a funding stream separate from existing Title XX grants.
"Medicaid is the fastest growing component of state budgets," said Senator Collins. "While state revenues were stagnant or declined in many states last year, Medicaid costs increased 11 percent. This year, they are increasing by an additional 13.4 percent. We need to help and we need to take action now." ###