The formula matters…

In any economic recovery package, a main component is expected to be an increase in Medi-Cal matching funds. Right now, California spends 50 cents on Medicaid and gets another 50 cents match from the federal government. The proposal is to temporarily increase that match.

Here is a new study by the Institute of Health Policy Studies, which goes through the different ways to do that match, and how the decision about that formular could mean billions of dollars for California:
http://www.ihps.org/pubs/IHPS_FMAP_Enhancement_Issues_011209.pdf

Here’s a letter that summarizes the findings:
IHPS%20FMAP%20Cover%20Letter.pdf

Using the Congressional Budget Office’s estimate for last fall’s Senate bill of $29.2 billion in
additional federal Medicaid funding as the low end of the range of federal fiscal relief and the Governor’s request for $50 billion a year as the high end of the range, we estimate that:
· Using the equal FMAP percentage points per state approach, California’s share of the Medicaid relief package would approximate $3.3 to 5.6 billion in FY 2009.
· Using the equal proportionate reduction in state cost approach analogous to the S-CHIP adjustment, California’s share of the Medicaid relief package would approximate $3.8 to 6.5 billion in FY 2009.
· Using the targeted approach with more relief for states with weaker economies, California’s share of the Medicaid relief package would approximate $4.0 to 6.8 billion in FY 2009.

In other words, an approach that uses the baseline of our lowest-in-the-nation Medicaid matching rate would disadvantage California; a targeted approach based on our economic condition would help California, given our weak unemployment rate.

California health advocates need to argue for the highest overall level of assistance, as well as a fair formula that ensures our dire economic situation is recognized.

Health Access California promotes quality, affordable health care for all Californians.

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