Health Care in the President’s Budget: Extension of ARRA FMAP Increase – Say Ahhh! A Children’s Health Policy Blog

While there hasn’t been much good news coming out of
Washington lately on the health care front, the President’s newly released
FY 2011 budget offers some positive developments.

Most notably, the budget proposes $25.5 billion to extend
the temporary FMAP increase for another six months, through June 2011. The FMAP
increase and its accompanying maintenance of effort provision, which was
included in last year’s stimulus bill (ARRA), has been an incredibly important
to help states maintain their Medicaid programs during an economic
downturn. Set to expire at the end of the calendar year (which is right in the
middle of states’ fiscal year), the Administration’s proposed extension would
provide critical relief to cash-strapped states. Since the budget extends the
recovery act provision, states would still need to maintain Medicaid
eligibility and enrollment/renewal procedures to receive the increased FMAP.

The budget also assumes savings from health reform, signifying the President’s continued commitment to passing a bill. Using the average of the savings estimated under the House and Senate bills, the budget projects roughly $150 billion in savings over 10 years. 

The budget also proposes:

 * Extending, through the end of 2010, the COBRA health
insurance premium assistance program
established under the recovery act (set to
expire at the end of this month).

* Providing an additional $290 million for community health care
centers, $110 million for continuing investments in health IT, and an increase of $250 million for Medicare, Medicaid, and CHIP fraud and abuse

* Allocating funding to strengthen rural health care,
expand Indian health services, increase wellness and prevention activities, and
conduct research on the comparative effectiveness of medical options.

* Establishing Medicaid and Medicare demonstration
projects to coordinate care and lower costs for seniors and those with chronic

Also of note is a 229% increase in state Medicaid
performance bonus payments. This change reflects the Administration’s
expectation that states will continue to enroll more children in Medicaid,
resulting in an increase from $73 million in FY 2010 to $240 million in FY 2011
in payments made to states.

The President proposed a couple of measures that could
impact programs for low-income families moving forward. This includes a 3-year non-security discretionary spending freeze
(although Medicaid, CHIP, and most health programs were excluded) and the creation of a
bi-partisan fiscal committee, which is charged with, among other things,
addressing the growth of entitlement spending.

Expect to hear more from us in the coming months as
Congress begins its work to have a final budget signed by the President by
October 1.

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