Extra COVID-19 Medicaid Funds Come at a High Cost to States

In March 2020, Congress passed a series of bills to respond to the COVID-19 public health emergency, including the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

But this federal funding bump comes with massive strings attached. In order to receive it, states cannot remove even ineligible enrollees unless those enrollees request a voluntary termination. States are also blocked from strengthening eligibility standards, methodologies, or procedures and cannot increase premiums beyond those in effect in January 2020. FFCRA also blocks states from requiring local governments to increase contributions to Medicaid.

Ultimately, these restrictions will prevent some states from receiving COVID-19 aid, exacerbate state budget crises stemming from the pandemic, strip states of needed tools to manage Medicaid, rob resources from the truly needy, and bind states’ hands for decades to come.