House Democrats proposed an 8% increase in federal Medicaid matching funds to states in Congress’ second legislative package in response to COVID-19, which could ease the burden of the outbreak on state budgets and provider reimbursement.
Democrats also proposed free testing for COVID-19 including among the uninsured, instituting emergency paid sick and family leave, enhanced unemployment insurance, expanded food security programs, and additional regulations to protect healthcare workers.
However, congressional Republicans are not on board with the package. Senate Majority Leader Mitch McConnell (R-Ky.) derided the bill as an “ideological wish list” Thursday morning and House Minority Leader Kevin McCarthy (R-Calif.) said Democrats’ bill is unworkable. House Speaker Nancy Pelosi (D-Calif.) said Thursday morning that negotiations are ongoing with the Trump administration.
The proposal comes a day after Medicaid Health Plans of America met with CMS officials to request agency guidance to establish a consistent plan for how states address the outbreak.
Hospitals had asked lawmakers to increase the Federal Medical Assistance Percentage (FMAP) because an economic downturn due to a global pandemic could lead to higher Medicaid enrollment and utilization.
“The potential impacts of COVID-19 include a significant strain on state budgets as states spend a significant portion of their budgets on Medicaid and revenues decline due to economic strain,” said Greater New York Hospital Association senior vice president of government affairs Jon Cooper.
States operate on balanced budgets and without assistance could be forced to cut Medicaid provider reimbursement or restrict eligibility to make ends meet in a time when hospitals could be stretched thin, said Georgetown University research professor Edwin Park.
“Instead of enhancing capacity, you would be moving in the opposite direction and weakening (hospitals’) financial situation, making the safety net less able to deal with an epidemic,” Park said.
Increasing federal Medicaid matching funds has been used before to stimulate the economy in legislative packages addressing recessions in 2001 and during the 2007-2009 financial crisis.
Michael Strain, director of economic policy studies at the right-leaning American Enterprise Institute, and former FDA Commissioner and AEI resident fellow Scott Gottlieb called for FMAP increases in an op-ed in The Wall Street Journal published Wednesday, but Park remained unsure whether the Trump administration would agree to expand federal Medicaid funding.
However, FMAP bumps in prior economic stimulus packages were passed on a bipartisan basis. The increased federal funding made available by the American Recovery and Reinvestment Act between October 2008 and June 2011 helped states maintain Medicaid benefits in recovery from the financial crisis, the Kaiser Family Foundation found.
“All states benefited from the fiscal relief and most states reported using the funds for multiple purposes such as addressing Medicaid or general fund budget shortfalls, helping to support increases in Medicaid enrollment, or to mitigate reductions in provider rates and benefits,” KFF wrote in an issue brief.
House Democrats’ bill also would require The Occupational Safety and Health Administration to issue an emergency temporary standard within one month requiring employers of healthcare workers to implement infectious disease control plans.
However, the Trump administration has so far ignored pleas from hospitals and health systems to declare COVID-19 a national disaster or emergency.
Hospital executives met at the White House with members of the Trump administration including Vice President Mike Pence and CMS Administrator Seema Verma and asked that the president declare COVID-19 a national disaster or emergency, which would allow the administration to waive requirements for skilled nursing facility coverage, limitations on critical access hospitals’ inpatient beds, and relax requirements that providers have a license in the state in which they are providing services if they have an equivalent license in another state.
But Trump did not declare COVID-19 a nationwide emergency in an address to the nation on Wednesday night and instead banned some travel from Europe, excluding the United Kingdom, for 30 days. Trump also said he planned to provide some paid sick leave for workers, ask the Small Business Administration to provide loans to affected businesses, and defer certain tax payments.
“This is not a financial crisis, this is just a temporary moment of time that we will overcome together as a nation and as a world,” Trump said.