What Does The “American Rescue Plan” Mean for Medicaid Recipients?

Health Policy

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The Summary

President Biden rolled out his latest plan for COVID-19 relief earlier this month, and it includes specific provisions for Medicaid

President Biden rolled out his latest plan for COVID-19 relief earlier this month, and it includes specific provisions for Medicaid.

President Joe Biden’s American Rescue Plan, proposed in mid-January, is a massive pandemic relief program that seeks to expand upon last month’s bipartisan relief package. Through direct aid, community support, and a national vaccine program that would provide 100 million vaccinations in 100 days, the new administration aims to “address the stark, intergenerational inequities that have worsened in the wake of COVID-19.”

The overall plan has a $1.9 trillion budget and includes components that will help Medicaid enrollees specifically, including provisions that all those enrolled in Medicaid will receive the COVID-19 vaccination.

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Implementing such a large-scale relief package while transitioning into a newly-inaugurated administration can be a tricky process. To ensure that this happens smoothly, President Biden will be working very closely with Congress to expand assistance for Medicaid enrollees.

What Medicaid provisions does the “American Rescue Plan” include?

The World Health Organization has confirmed that COVID-19 has been plaguing the world for almost a year now. And while the pandemic has presented major problems for everyone, it has disproportionately affected low-income Americans who are enrolled in Medicaid. This disparity is especially prevalent in states with high unemployment rates and within communities of color. The American Rescue Plan includes a $160 billion budget for vaccine distribution, expansion, and testing that aims to help these communities.

Part of these funds would be used to create public medical centers across the country, as well as mobile units that service hard-to-reach areas. These medical facilities would build “partnership[s] with states, localities, Tribes and territories'' in order to maximize vaccine distribution. The program’s goal is two-fold: to make the vaccine more accessible and to prevent a supply shortage in the vaccine that could disproportionately affect Medicaid recipients.

Another aspect of the plan is to increase the Federal Medicaid Assistance Percentage (FMAP).  Remember, Medicaid is the federal and state health insurance program for low-income Americans. The FMAP is just the percentage of Medicaid assistance financed by the federal government - the remainder is referred to as the “state’s share.”

The FMAP has historically ranged from 50 percent to 83 percent, but Biden’s plan seeks to raise federal coverage of vaccine administration to 100 percent. This could ease the pandemic’s financial burden on individual states.

Why should this matter to you?

The American Rescue Plan doesn’t just impact Medicaid recipients. Other facets of the plan include stimulus checks for each household, raising the minimum wage, and providing support to small businesses.

Of course, all this comes with a hefty price tag which will raise federal spending on COVID-19 relief to over $5 trillion. We can expect to see robust policy debates within Congress and increased scrutiny from voters as a result of this large federal expenditure.

And that’s a good thing. This plan should matter to everyone, regardless of whether they are directly receiving Medicaid support, because it will affect the entire federal budget and determine the future of COVID-19 relief. Understanding how this program impacts you will prepare you to take action and hold your elected leaders accountable.

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