Floor Statement on the Transitional Federal Medical Assistance Percentage Act
Mr. President, I rise today to introduce the Transitional Federal Medical Assistance Percentage, FMAP, Act, and I am pleased to do so with the support of Senators Brown, Whitehouse, Akaka, Durbin, Klobuchar, and Begich. This bill is an important step in continuing the conversation about how we can help our States, businesses, and individuals as our economy recovers.
In my State of Rhode Island, the economic downturn has been particularly hard hitting on families and businesses. As a result, the State has seen a decline in tax revenue and an increased enrollment in safety net programs like Medicaid. Revenue from the sales tax is down over 7 percent, income tax receipts are down 2.3 percent, and corporate tax revenue is down nearly 10 percent. At the same time, unemployment rates have soared to new heights, topping 13 percent earlier this year. In the past 2 years, 40,000 Rhode Islanders have lost their employer-sponsored health insurance. Many of these individuals have come to rely on Medicaid for health coverage. This has caused great strain on the State's resources and its Medicaid program. In November, we learned that the estimated Medicaid caseload for the year will cost over $40 million more than what the State had initially estimated in its budget.
The American Recovery and Reinvestment Act, which I supported, provided States with additional Federal assistance through 2010. States have used these funds to help balance their budgets, minimize harmful cuts in public services, and, very importantly, to prevent tax increases in many cases. However, even with the funding from the Recovery Act, Rhode Island will close the current fiscal year $219.8 million in the red.
A total of 38 States have looked ahead to fiscal year 2011, and they have estimated $92 billion in combined deficits in the coming year. As the State fiscal year nears, and more States have had ample time to analyze their fiscal health it is expected that the total shortfall will likely equal $180 billion.
As Congress debates health reform and works to ensure that every American has access to health insurance in 2014, we must not forget about ensuring that Americans have access to health insurance between now and then, as the economy slowly recovers and as state budgets begin to heal. During this tough time we need to help individuals, businesses, and States, and I am particularly concerned with making sure our States have the resources to provide adequate health care.
Unless Congress acts on FMAP legislation, States will be forced to use their limited resources to cover an expanded Medicaid population beginning in January 2011. Since States are planning their fiscal year 2011 budgets, which will begin in July, many Governors are requesting Congress act now to provide States with additional Federal support.
The Transitional FMAP Act would extend the enhanced FMAP funding which we passed in the Recovery Act for two additional quarters. This extension accounts for the prolonged recession and ensures that the pressure of Medicaid needs do not overwhelm the States. The bill would also begin a slow decrease of enhanced FMAP funding from July 2011 through December 2013. This will help States as they recover and ensure that States do not experience a gap in assistance prior to health reform-related FMAP levels beginning in January 2014.
Mr. President, this additional funding is important for States, businesses, and individuals. I know that Chairman Baucus and Leader Reid are well aware of the importance of FMAP and have a history to working to aid our States. I look forward to working with them and my other colleagues to provide States with necessary additional Federal Medicaid assistance.