January 27, 2021

The Biden Administration has indicated there will be an extension of the enhanced Federal Medicaid match (FMAP) rate through the beginning of 2022.  This means the current prohibitions on states’ ability to restrict access to the Medicaid program will also continue (through the provisions of the Maintenance of Effort, or MOE, associated with the enhanced match).  The implications for BH providers is indirect but still important to understand.   Unfortunately, FMAP enhanced rates do not ordinarily flow directly to the actual Programs or Services delivering the services that are getting the enhanced rate.  Instead, the Administration often uses these funds to subsidize budget deficits (and most recently, the current budget deficit).  Having said this, the Governor did state recently that the enhanced FMAP rates do contribute to the states decision to reduce the proposed reductions to state aid that impact our members profoundly.  Enhanced FMAP was cited along with slightly better than predicted tax revenues and several other indicators for the proposed reduction to the state aid reductions.  Of course, the proposed 5% whether reduction becomes permanent will depend on how much federal aid NY receives from coming legislative packages to be debated by Congress shortly.

Late last year, Governor Cuomo was very public with his requests that NYS be exempted from the MOE, due to our financial struggles.  The NYS Council worked alongside other advocacy organizations to ensure NYS would not be permitted to restrict access to the Medicaid program during the pandemic.  In the past, conservative NYS lawmakers have proposed initiatives that would have the effect of narrowing the front door to the Medicaid Program.  While those proposals have failed, as state revenues continue to falter, the pressure becomes greater to reduce entitlements such as Medicaid.

If NYS receives the full amount of federal funding it has requested ($15B), we can anticipate calls for NYS to be exempted from the MOE will be laid aside whereas if NYS does not get the $15B it has requested, the cuts the Governor has lined out in his executive budget proposal are far more likely to be enacted and this could include a re-start of the requests from NYS to exempt us from the MOE.  Of course, the Legislature will have something to say about proposed budget cuts before the budget is enacted.

Here is a blog post by the Georgetown Center for Children and Families that explains the details re:  FMAP enhanced rates