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Capitol Correspondence - 02.09.21

Big Picture: Senate Democrats Push for Medicaid Expansion Incentives

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With state budgets under significant pressure because of the economic recession and increased spending caused by the COVID-19 pandemic, Senate discussions surrounding incentivizing states to expand Medicaid could both help and complicate that fiscal landscape. Broader state budget financial pressures increase the financial vulnerability of Medicaid disability supports, the majority of which are funded through the Home and Community-Based Services (HCBS) program, which functions as an optional waiver and is vulnerable to cuts during fiscally austere times. While Medicaid expansion operates from a different funding stream than HCBS services, increased funding for it could relieve fiscal pressures on states and make HCBS less vulnerable, though it would also increase state spending due to the Medicaid federal-state partnership. As reported by Politico Pulse:

FIRST IN PULSE: DEMOCRATS PUSH MEDICAID EXPANSION INCENTIVES — A group of Senate Democrats are reintroducing legislation aimed at incentivizing holdout states to expand Medicaid under the Affordable Care Act, Alice reports.

The proposal, led by Sens. Mark Warner (D-Va.) and Raphael Warnock (D-Ga.), would give additional federal funding to the states that expanded Medicaid after 2014 as well as those that choose to do so in the future; the extra money would be enough to cover the full cost of expansion for three years, before tapering down to a 90 percent federal match by the sixth year of expansion.”