How the Biden Administration’s $1.9 trillion relief bill will impact Medicaid in Massachusetts
The American Rescue Plan Act (ARPA) — a COVID-19 relief and recovery package — was signed into law by President Joseph Biden last month. Among the $1.9 trillion relief bill’s provisions is a temporary enhanced federal matching percentage (FMAP) for Medicaid home and community-based services. The FMAP is the proportion of every Medicaid dollar spent paid for by the Federal government. Massachusetts could receive as much as $409.2 million during the one-year period covered.
“One of ARPA’s goals is to strengthen state efforts to help seniors and people with disabilities live in their homes and communities rather than in nursing homes or other institutional settings,” said Edward Alan Miller, PhD, a fellow at the Gerontology Institute at UMass Boston and professor in the university’s Department of Gerontology. “The imperative to do so has been underlined by the COVID-19 pandemic which increased demand for safe, high quality alternatives to institutional settings where morbidity and mortality threats from the virus are greatest.”
Organizations serving vulnerable populations — AARP Massachusetts, the Dignity Alliance of Massachusetts and Disability Advocates Advancing our Healthcare Rights — gathered stakeholders statewide recently to look at how this new funding could be directed in Massachusetts and, in particular, expanding and strengthening home and community-based services. Miller was among the speakers to address the group.
The Centers for Medicaid and Medicare Services (CMS) had already allowed states certain flexibilities in meeting the COVID-19 crisis through the option to adopt temporary changes to their Medicaid programs covering home and community-based services. Furthermore, prior legislation had increased the federal matching rate by 6.2 percentage points across Medicaid services for the duration of the Coronavirus emergency. ARPA increased the federal matching rate by an additional 10 percentage points for home and community-based services (HCBS), specifically. The federal government typically pays for half of Massachusetts Medicaid costs. Combined with the early increase, 66.2% of the Commonwealth’s HCBS costs would be paid for by the federal government under ARPA for one year.
“Key stakeholders see the value of the flexibility ARPA provides to address needs across a range of services and populations needing home and community-based support,” says Miller. “There is particular interest in improving the work conditions of direct care workers, including raising wages and benefits to increase their quality of life and improve recruitment and retention. These are issues that directly impact the quality of care delivered.”
In addition, care recipients and advocates view the ARAP legislation as an opportunity to fund the additional services and supports necessary to maintain older adults and younger people with physical disabilities, developmental disabilities, and severe mental illness at home and in the community, not just during the pandemic but beyond.
One key area the legislation does not detail is whether changes considered by states need to be shared, reviewed, or approved in advance by the federal government. The Massachusetts Office of Health and Human Services is waiting for guidance from CMS before finalizing or implementing plans to take advantage of the enhanced federal match. Although the funding period began April 1, 2021, the state would not lose money if plans were not implemented by that date.
“Developing strategies and processes that best enable states to take advantage of ARPA’s enhanced federal matching funds would give them a leg up should substantial additional resources become available through the American Jobs Plan and other potentially forthcoming federal legislation,” said Miller. Critical to success is consultation with community stakeholders to outline plans on how to expend the additional revenues in the most effective way possible to the greatest benefit of care recipients, their families, and the front-line staff who care for them.”