Medicaid is funded by both state and federal dollars. The federal government matches what states spend on the program under what is known as the Federal Medical Assistance Percentage. FMAP is determined by a state’s per capita income so that poorer states tend to receive larger FMAPs. For example, Mississippi, the poorest state in the country, receives an FMAP of 84%.
Under the 2010 Affordable Care Act, known as Obamacare, states obtain the option of expanding their Medicare programs to cover people up to 138% of the federal poverty level. The federal government funds 90% of Medicaid expansion.
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If states who have yet to expand Medicaid agree to expand their programs, they will receive an FMAP increase of 5 percentage points for two years under the American Rescue Plan Act.
“This makes what was a good deal and a good idea even better,” stated Jesse Cross-Call, a senior policy analyst in the health policy division at the liberal Center on Budget and Policy Priorities. “In the non-expansion states, there are millions of people without healthcare. In the middle of a pandemic and recession, the need is there.”
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For those states, the FMAP increase could mean an additional $22.5 billion for their Medicaid budgets for two years, according to an analysis by the CBPP.
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But some argue that money will come with strings attached.
“I worry for the states that the money is lulling them to sleep,” said Nina Owcharenki Schaefer, a senior research fellow for health policy at the conservative Heritage Foundation. “The more the federal government controls the funding, the more it will interfere with and limit what states can do with Medicaid.”
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For Wyoming, expansion could mean an extra $120 million in Medicaid funding over two years.
A bill to expand Medicaid in Wyoming passed out the state Senate’s Labor, Health and Social Services Committee Monday evening by a 3-2 vote. State Sen. Chris Rothfuss, a Democrat from Laramie, introduced the bill.
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The FMAP increase factored into the debate over it.
“The increase was definitely some that was presented by Sen. Rothfuss. He spoke about that,” said Cassie Craven, an attorney and lobbyist for the conservative Wyoming Liberty Group.
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Rebekah Smith, the director of the liberal Wyoming Women’s Foundation, added that the Labor, Health and Social Services Committee “discussed the FMAP boost in the American Rescue Act Plan and asked questions about it. However, I would say the conversation included a larger picture.”
“Sen. McKeown is a new legislator this year, and I think he got confused and voted the wrong way,” revealed Craven. “I’ve spoken to him a couple of times, and I think he would tell you that same thing.”
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