Colorado Consumer Health Initiative criticizes Senate GOP COVID package; Calls for FMAP increase

The Colorado Consumer Health Initiative (CCHI), a nonprofit health consumer advocacy group, issued a statement today criticizing the U.S. Senate Republican COVID-19 relief plan and called on Congress to provide states with increased Medicaid funding.

Senate Republicans unveiled their roughly $1 trillion stimulus plan earlier today. The plan includes another round of $1,200 dollar direct payments, $16 billion in funding to expand testing, and $26 billion in funding for vaccine development and distribution. It also includes a $400 cut in enhanced unemployment benefits, down to $200-per-week from the original $600.

 

 

The plan will function as an opening bid for bipartisan negotiations with Congressional Democrats in the effort to pass a new round of funding in response to the pandemic.

CCHI took issue with the plan not including provisions to shore up health coverage amid Colorado’s budget crisis.

Coloradans’ need for Medicaid coverage has surged during the coronavirus pandemic, as unemployment skyrockets and the economy declines. The Senate Republican proposal ignores this growing need, despite bipartisan calls for additional federal Medicaid funding for states. Their plan does not include the funds states need to avert damaging cuts to Medicaid and other critical health services,” said Adam Fox, CCHI’s Director of Strategic Engagement.” “The Senate Republican plan is really a disservice to all of us by not focusing on the needs of our communities and failing to heal the devastation brought by COVID-19. It’s irresponsible and won’t help Coloradans or our state weather and recover from this crisis.”

Underscoring the sense of urgency driving their push to secure additional Medicaid funding, CCHI pointed to the implications of Colorado’s rising unemployment rate. Colorado’s unemployment rate spiked from 2.5 percent in February to 10.5 percent in June. Downstream of unemployment, Medicaid enrollment in Colorado is predicted to increase by roughly 500,000 by the end of the year – an unprecedented number.

Concomitantly, Colorado has been forced to grapple with a $3 billion budget shortfall by making cuts to a wide range of services, including Medicaid.

State budget shortfalls are projected to total $555 billion nationwide through fiscal year 2022, according to the Center on Budget and Policy Priorities (CBPP). The CBPP noted that this number represents a sharper drop than even in the worst three years of the Great Recession and its aftermath, and this is before the added state and local costs needed to contain the virus.

To avoid Medicaid cuts and protect coverage, 57 Colorado organizations, including CCHI, sent a letter to Colorado Senators Michael Bennet and Cory Gardner to ensure the next COVID relief package substantially increases the share of Medicaid costs paid by the federal government, or the Federal Medical Assistance Percentage (FMAP).

Specifically, CCHI called for the following actions:

    • Providing a substantial additional FMAP increase, along the lines of the 14 percentage point increase in the House-passed Heroes Act.

    • Keeping higher FMAPs in place until the labor market and state budgets recover, but at least through June 30, 2021 (as in the House-passed Heroes Act).

    • Continuing strong maintenance-of-effort (MOE) protections that prevent cuts to coverage.

The Government Accountability Office (GAO) and Kaiser Family Foundation have published research concluding that FMAP increases kept states from making broad cuts to Medicaid during the Great Recession.

While the FMAP percentage was increased by 6.2 points in March as part of the Families First Coronavirus Response Act, some argue an increase of that amount does not go far enough. The FMAP increase could expire whenever HHS declares pandemic over, irrespective of state economic conditions.