This last weekend, the nation’s Governors came together for their annual meeting in Boston where the main topic of conversation was the economic crisis that continues to cripple state budgets. One of the key policies many of the Governors made a pitch for was an extension of fiscal relief for strapped states through the extension of increased federal support for Medicaid (aka FMAP) . As my colleague Joe Touschner pointed out in a blog last month: “That extra support has helped states through one of the worst fiscal crises on record and has been vital in stabilizing Medicaid coverage for children and others in families facing job loss.”
My colleague Jocelyn Guyer also blogged about this topic earlier this week and I wanted to follow-up her comments with another look at why the Governors (and many others) think it is so critical for Congress to act sooner rather than later on an FMAP extension. To do that, I pulled out a brief that Jocelyn and I, along with our colleague here at CCF, Martha Heberlein, did back in 2008 when the economic crisis we are currently in, began.
In this brief, we noted the astonishing progress that states had made over the last decade in covering uninsured children and explained that that progress was at risk due to the worsening economic climate facing states and a dramatic increase in the number of uninsured seeking coverage through Medicaid and CHIP. We cited research from the Urban Institute that found that a one percentage point rise in the national unemployment rate can be expected to cause the number of uninsured people to grow by 1.1 million and to increase Medicaid and CHIP enrollment by one million (including 600,000 children and 400,000 non-elderly adults).
At the time, we considered the implications of this study if the unemployment rate reached 7.5 percent. Today, we face an unemployment rate of around 9.5 percent- and the model employed two years ago would suggest that as a result, the number of people that have lost employer-based coverage is 11.2 million; 4.7 million have likely enrolled in Medicaid or CHIP and about 5.1 million more people have become uninsured.
In the 2008 brief, we outlined key policies that lawmakers were considering to assist families through this crisis- reauthorizing CHIP and temporarily increasing the federal funding for Medicaid through increasing the FMAP. CHIP has been reauthorized, the FMAP was increased until the end of this fiscal year and health care reform was been signed into law. However, the economic crisis continues and has likely resulted in millions of more people seeking coverage through Medicaid and CHIP just when the federal commitment to help states weather this economic storm appears to be eroding. While help is on the horizon in 2014 when states will receive new federal support through health reform, states need help now to meet the unprecedented demand for publicly-funded health care coverage. It would be a mistake for the federal government to turn its back on the states before our nation has clearly pulled itself out of the recession.
