Rescue funds running out

Jan Hudson

Michigan’s unfortunate economic situation has translated to billions of federal recovery funds for the state through the Medicaid program.

One of the key components of the American Recovery and Reinvestment Act (ARRA) is the increased federal participation in the Medicaid program. 

 This was certainly a win-win for the state and the 1.8 million Michiganians who need the health care benefits provided by the Medicaid program.

The state was both mandated to retain eligibility during the period covered by the recovery funds, October 1, 2008 – December 31, 2010, and able to retain most services.  (We continue to advocate strongly for restoration of those services that have been eliminated.)

The League recently published a brief, Billions in Federal Recovery Funds Rescue Medicaid Through Increased Federal Medicaid Participation Rates, detailing the benefits to Michigan of the ARRA provision that increased the state’s Federal Medical Assistance Percentage (FMAP), and highlighting the fact that Michigan received over $2.2 billion of federal recovery funds to help sustain the Medicaid program. 

As with many good things, this will come to an end on December 31, 2010, and the state will have a very large hole – $800 million – to fill to maintain critical health care services for low-income children, the elderly and the disabled.

While some complain about the increases in the Medicaid caseload over the last several years, a quick look at job losses in this state (an estimated 278,000 in 2009 alone) certainly helps to explain the caseload increases as thousands of people have lost their jobs and their corresponding health care coverage.  

Many of us breathe a sigh of relief that the Medicaid program is there to provide comprehensive health care coverage to low-income (up to 200 percent of the federal poverty level, $36,624 for a family of three, for the combined Medicaid and MIChild programs) children who would likely otherwise be uninsured.  Most parents are not eligible because the program’s eligibility limits for parents are so low – about 48 percent of the federal poverty level (less than $8,800 in annual income for a family of three) and so are left to fend for themselves.

If there is a silver lining in the state’s economic downturn, it is that the federal government will pay a greater share of the state’s Medicaid costs.  While the post-ARRA matching percentage will be significantly below (about 10 percentage points) the ARRA rate, the regular matching percentage will be nearly 10 percentage points above where it was just five years ago.

Medicaid efficiently provides critical health care services and is a good economic engine for the state.  Let’s hope policymakers remember the benefits of this program as they establish their FY2011 spending priorities and not seek to fill the $800 million hole by simply cutting necessary services, eligible people, or provider rates.

Hopefully, new revenue options will be included in the deliberations. Policymakers must understand that budgets are not just numbers on paper to be balanced, they are about real peoples’ lives.

See the League’s Facts Matter, for options to pay for essential services.

— Jan Hudson


2 Responses to Rescue funds running out

  1. Denise Sloan says:

    Well done! Thanks for the insight.

  2. Lise Lisko says:

    I am the wife of a high functioning alcoholic. He is a worthy employee in a middle level management line of work. He is an notable father who adores his two young boys and he has been a good husband to me (I can likely count the times we have increased our voices in angriness, in fifteen years) and he is a good and sincere friend. His drunkenness has multiplied and escalated since the birth of our 1st boy about 10 years past. I inadvertently discovered that he had been hiding vodka in our home office in the form of vodka plane bottles. He drinks beer in front of us but exclusively drinks vodka behind closed doors. After five PM he becomes loaded promptly and frequently doesnt even last until the childrens bedtime. I want to shield my boys from his intoxication. I sought out aid in the form of personal therapy and al-anon, which has helped. I urged him to try out therapy and he did but was quickly released because, (by his own admission), he did not in full reveal. He has only recently wanted the help of AA and it looks to be of some help. I am very explicit in the fact that I do not want to be co-dependant and that I wish him to know that I strongly disapprove of the drinking while I want to extend some positive reinforcement when he does not drink.

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