U.S. Sen. Michael Bennet has cosponsored legislation that would tie federal assistance for Medicaid to a state’s unemployment conditions, instead of the current formula based on per capita incomes.
“States like Colorado are grappling with the increase in demand for Medicaid coverage due to COVID-19 while also facing major budget shortfalls,” Bennet said. “We must ensure there is continuous support in place for states to care for Medicaid beneficiaries during the COVID-19 pandemic and in any future economic crisis. The Coronavirus Medicaid Response Act would automatically help stabilize Medicaid programs across the country during a period of increased demand.”
The Kaiser Family Foundation notes that for fiscal year 2021, the Federal Medical Assistance Percentage for Colorado is 50%. While the federal share of the joint national-state health insurance program for low-income Americans must be at least half, it is nearly 78% in Mississippi and 75% in West Virginia.
“Medicaid is a big expense for states and it’s one that typically goes up in recessions as more people rely on Medicaid for their health care,” said Jay Schambaugh, a professor of economics at George Washington University. “A proposal like this is a very sensible way to help states financially and make sure they have the resources to spend on Medicaid.”
The bill would instead adjust the percentage based on state unemployment rates. More than $3 billion in Colorado goes from the general fund to the department that oversees Medicaid annually.