Schumer is part of the Senate leadership helping President-elect Barack Obama’s transition team carve out the details of the pending economic stimulus package.
The package is currently estimated to be about $800 billion. Of that amount, $80 to $100 billion will be dedicated to the Federal Medical Assistance Percentage (FMAP) program. The FMAP is a matching program; the federal government will match 50 to 85 percent of however much states spend on providing Medicaid. Funding from FMAP is the primary way states get money back from the federal government.
Under the Obama stimulus plan, New York State would receive an additional $5 billion each year for the next two years. Though the funds may only go toward Medicaid, the help will free up State funds for other things, such as education or infrastructure improvements. Currently the State has a $14 billion budget gap.
“Every dollar sent to New York by the federal government is one less dollar that the State has to get by raising taxes or laying off people or cutting programs,” Schumer said.
For fiscal year 2009, New York will be one of 13 states whose FMAP rate is 50 percent; for every dollar the State spends on medical care, the federal government also spends a dollar. This is an increase from the current reimbursement rate.
Temporarily increasing the FMAP rate during a recession is not something new. In 2003, each state’s FMAP rate was increased by 2.95 percentage points.
Schumer was careful to note that the help from FMAP will not completely lift the State’s Medicaid or budget burdens, only lessen them for the time being.
Addressing concerns that the money may not get to the local level, Schumer said, “New York is one of 11 states where localities (city governments) have to pick up some of the Medicaid costs, and one of the things that we are requiring is that either a certain percentage of the money go to those localities. But even if we don’t do that, it will still free up money to help localities.”
