Sign-On Letter on the Federal Medicaid Matching Rate

June 27, 2002

Dear Senator:

We are writing in support of two bills providing a temporary increase in the federal Medicaid matching rate (also known as the “FMAP”) introduced by Senators Jay Rockefeller and Gordon Smith (S. 2221) and Senators Susan Collins and Ben Nelson (S. 2570). Both proposals would offer immediate and effective fiscal relief to states affected by the recent economic downturn and also help strengthen the Medicaid program that serves millions of low-income children, pregnant women, families, seniors and persons with disabilities.

While the recession may have ended, states are still experiencing severe budget deficits. According to the National Governors Association, states have an aggregate fiscal shortfall of $40 billion to $50 billion — a deficit more severe than the one states experienced during the worse year of the previous recession.

Because nearly all states are required to balance their budgets even during a recession, states have already raised taxes and/or cut countercyclical programs like Medicaid even as low-income families that have lost their jobs and health insurance because of the economic downturn most need them.

As fiscal pressures continue to mount and states struggle to balance their budgets for the coming fiscal year starting July 1st, they may institute further tax increases and/or more severe program cuts that will dampen the prospects for a rapid and sustained economic recovery.

While to date many states have been able to reduce Medicaid spending without cutting back eligibility significantly, they will increasingly have to make substantial reductions in eligibility that could leave hundreds of thousands more children, pregnant women, families, seniors and persons with disabilities uninsured. To guarantee that Medicaid beneficiaries are protected, both fiscal relief bills include language that ensures that states receiving additional federal funding do not roll back eligibility.

A temporary increase in the FMAP would provide essential fiscal relief to states and help avert or reduce the magnitude of further state cuts to Medicaid, as well as other programs, that serve vulnerable low-income populations. We urge you to cosponsor one or both of these fiscal relief bills as soon as possible.

Sincerely,

AFL-CIO
AIDS Action
Alliance for Children and Families
Alliance for Retired Americans
Alzheimer’s Association
American Academy of Child and Adolescent Psychiatry
American Association of Homes and Services for the Aging
American Association on Mental Retardation
American College of Nurse-Midwives
American College of Obstetricians and Gynecologists
American Counseling Association
American Federation of State, County and Municipal Employees
American Health Care Association
American Network of Community Options and Resources
American Psychiatric Association
American Psychological Association
Ascension Health
Bazelon Center for Mental Health Law
Center on Disability and Health
Child Welfare League of America
Consortium for Citizens with Disabilities Health Task Force
Easter Seals
Epilepsy Foundation
Families USA
Family Voices
Friends Committee on National Legislation (Quaker)
International Union, UAW
March of Dimes
Legal Action Center
Lutheran Services in America
National Alliance for the Mentally Ill
National Association for Home Care
National Association of Community Health Centers
National Association of Protection and Advocacy Systems
National Association of Social Workers
National Council on the Aging
National Education Association
National Health Law Program
National Mental Health Association
National Multiple Sclerosis Society
National Partnership for Women and Families
NETWORK: A National Catholic Social Justice Lobby
Planned Parenthood Federation of America
Service Employees International Union
The Arc of the United States
Tourette Syndrome Association
United Cerebral Palsy Associations
United Jewish Communities
Voice of the Retarded