With New Subsidies, Holdout States May Expand Medicaid

With the passage of the American Rescue Plan (ARP), states that haven’t expanded Medicaid have an extra reason to do so: the COVID-19 relief bill offers financial incentives to states that increase Medicaid eligibility under the Affordable Care Act (ACA). Some states where Medicaid expansion has historically been a nonstarter to conservative elected officials are reconsidering their status — and the biggest states that haven’t yet expanded Medicaid, Florida and Texas, may even change their tune in coming years.

The ARP gives states that expand Medicaid a 5 percentage-point increase in their Federal Medical Assistance Percentage (FMAP) for the first two years of expansion. That’s in addition to the 6.2 percentage-point FMAP increase that all states are getting for the duration of the COVID-19 public health emergency, and the 90% federal funding match rate that Medicaid expansion states receive under the ACA.

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Peter Johnson

Peter Johnson

Peter has worked as a journalist since 2011 and has covered health care since 2020. At AIS Health, Peter covers trends in finance, business and policy that affect the health insurance and pharma sectors. For Health Plan Weekly, he covers all aspects of the U.S. health insurance sector, including employer-sponsored insurance, Medicaid managed care, Medicare Advantage and the Affordable Care Act individual marketplaces. In Radar on Drug Benefits, Peter covers the operations of (and conflicts between) pharmacy benefit managers and pharmaceutical manufacturers, with a particular focus on pricing dynamics and market access. Before joining AIS Health, Peter covered transportation, public safety and local government for various outlets in Seattle, his hometown and current place of residence. He graduated with a B.A. from Colby College.

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