Health Equity
Medicaid Enrollment Touches 39% of the Residents of The District of Columbia; DC’s 70/30 FMAP is Vital for the Maintenance of Health & Human Services
A reduction in the District’s FMAP would not lead to long-term government savings and would have a ripple effect throughout the entire health system in the DMV, crippling access to care for not only Medicaid beneficiaries but also all those who live, work, and visit the District of Columbia, including members of Congress and their staffs.
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Why does DC receive an Enhanced FMAP Rate?
The DC FMAP rate of 70% established by the Revitalization Act resulted from bipartisan analysis, discussion, and negotiation by Congressional leadership aiming to balance fairness with the District’s restricted ability to generate revenue. Congress recognized that the District of Columbia faces unique financial challenges due to its non-state status and the significant amount of federally-owned land within its boundaries. The District is unable to tax non-residents’ earnings, so these workers pay no taxes to support the infrastructure and services, such as roads, public safety and emergency services that they benefit from in the District. The District is also unable to tax up to 40% of the real property within its borders due to statutory restrictions.
Why are we concerned about DC's FMAP now?
Members of Congress have proposed reducing the DC FMAP to the statutory minimum for all other states, which is currently 50% (but could be reduced even more). Such a change would impact every physician and every practice, regardless of type, location, and payers contracted. Even practices who take no insurance will not be able to send patients for specialist care, hospital admissions, or other types of care.
What can MSDC members do?
- If you know a member of Congress or staffer, reach out to them and share how DC cuts will hurt your patients.
- Share your relationships and outreach with hay@msdc.org so we can help coordinate advocacy efforts.
- Email hay@msdc.org if you would like to be paired with a physician member of Congress office and trained by MSDC staff on how to reach out.
Resources
- DC FMAP cut fact sheet
- California Medical Association fact sheet on Medicaid cuts
- MSDC and healthcare association letter to Congress arguing against DC FMAP changes.
- MSDC original story on Medicaid changes.
News, Statements, and Testimony on Health Equity Issues
Congress Considering Reducing DC Medicaid Match - Why You Need to Pay Attention
UPDATES: MSDC has joined two letters on Medicaid reform - one with other state medical societies and one with DC healthcare associations.
Summary: Reducing DC's FMAP from 70% to 50% will reduce reimbursements and harm the DC Medicaid program.
The issue: As part of deliberations on how to cut government spending, House Republicans have included a proposal in their "wish list" to reduce the DC's FMAP from 70% to 50%. The 70% match is federal law, so the proposal would be to change the law to align DC with every other state's minimum 50% minimum. The change, per the document, would "save" the federal government $800m a year, or $8b over ten years.
The Concern: Removing $800m a year from federal dollars into the District's Medicaid program would require major changes, including reimbursement cuts to providers, reduced benefits, and scaled back eligibility. DC may also need to consider revenue raisers to close gaps. This would also be on top of other changes to Medicaid and new DC funding pressures.
How to remain involved: Sign up for MSDC's new advocacy alerts here. Contact your member of Congress (if you live in Maryland or Virginia) to urge them to resist any cuts. Contact members of Congress and staff you know to educate them on this issue.
Background: The federal Medicaid match rate, also known as the Federal Medical Assistance Percentage (FMAP), determines the proportion of Medicaid costs that are covered by the federal government versus the state or district government. The FMAP can vary across states and territories based on factors such as per capita income.
DC has a different minimum match by law for specific reasons. After Congress removed the control Board and began re-establishing some home rule in the 1990s, it had to address a financially unique situation. A GAO report explains:
Under the Revitalization Act, the federal government assumed financial and administrative responsibilities for one of the District’s largest fiscal burdens, which it inherited from the federal government as part of the transition to Home Rule in 1973—its unfunded pension liability for vested teachers, police, firefighters, and judges. In 1998, the federal government assumed the accrued pension cost of $3.5 billion that existed at the close of 1997. The District remains responsible for funding benefits for services rendered after June 30, 1997, and continues the plan under substantially the same terms. In addition, the Revitalization Act was part of a larger act— the Balanced Budget Act of 1997—that increased the federal share of District Medicaid payments from 50 to 70 percent.
Prior to the Revitalization Act, the District had been receiving a federal payment since the mid-1800s due to the District’s unique relationship with the federal government. The Congress recognized that the District’s ability to raise revenues was affected by a number of legal and practical limitations on its authority—the immunity of federal property from taxation; the building height restriction, which has a limiting effect on commercial property values; the prohibition on the District from passing a law to tax the income of nonresidents; and the restriction on imposing sales taxes on military and diplomatic purchases.
Due to these revenue restrictions, federal law permits enhanced reimbursement. At this point, according to the DC Fiscal Policy Institute, Medicaid and federal grants are 25% of District revenue.