President Obama signing the stimulus bill.
The American Reinvestment and Recovery Act of 2009 - known as the economic stimulus bill – will provide $87 billion in additional federal Medicaid funding for states for expenditures between October 1, 2008 and December 31, 2010. This is very good news for states, many that have proposed significant cuts in their programs. The funding will be allocated to the states in the form of an increase in their federal medical assistance percentage – FMAP – thus lowering the state’s share of the costs.
The new funds are based on a formula set forth in the legislation. First, states will be protected from any scheduled decrease in their rate – a “hold harmless” provision, and then each state will get an across the board increase — 6.2% for all of FY2009, all of 2010 and the first quarter of 2011. In order to qualify for the funds, states must maintain eligibility levels for Medicaid that were in place as of July 2008. This will account for a little over 2/3 of the total allotment. The remaining 35% will be given to states with higher unemployment rates.
The White House said this money will help roughly 20 million people who might otherwise lose their health insurance. More information about your state’s allocation can be found at Families USA.
In addition to the $87 billion in Medicaid funds, there are other important health-related provisions in the bill:
- $25 billion to pay 65 percent of insurance premiums for about 7 million workers who have lost their jobs but who want to keep their employer-sponsored health insurance.
- $19 billion to encourage the broader use of health information technology such as electronic medical records and electronic prescriptions, via incentive payments to doctors through Medicare and Medicaid.
- $10 billion to increase medical research funding through the U.S. National Institutes of Health and to renovate research facilities. This is expected to fund research into cancer, heart disease, diabetes, Alzheimer’s, obesity and other ailments.
- $1.1 billion for “comparative effectiveness” research to compare drugs, medical devices and other treatments to try to find out which work the best, potentially saving money by weeding out less effective treatments.
Carol Regan
Director
HCHCW
cregan@phinational.org
