President Obama signed into law on Tuesday a bill (HR 1586) passed earlier by the House that includes a six-month extension through June 2011 of Medicaid's temporary enhanced Federal Medical Assistance Percentage (FMAP) for the states. FMAP was introduced last year to help financially strapped states pay for additional Medicaid coverage under the economic stimulus package.
The House returned in the midst of its five-week recess to vote for the measure 247 to 161. FMAP runs through Dec. 31 of this year, but many states had been calling for an extension since earlier this year in order to coincide with their state budget planning efforts. The House initially dropped the FMAP provision in its jobs bill approved in May over price tag concerns.
The bill approved by the House on Tuesday scaled back the FMAP increase from the initial 6.2% for six months to 3.2% for the first quarter (January 2011 through March 2011) and 1.2% for the second quarter (April 2011 through June 2011). Those states with high unemployment will continue to receive additional percentage points in funding during the six-month extension.
The cost of the bill is $26 billion, with $16 billion of that going to help states address growing Medicaid budget deficits. Another $10 billion was aimed at providing educational assistance in the states. The Congressional Budget Office said that the bill will reduce the deficit by $1.4 billion.