This fact sheet discusses the role played by the enhanced federal Medicaid matching funds available to states through the American Recovery and Reinvestment Act of 2009 (ARRA), and the implications for state Medicaid programs as that extra assistance expires June 30, 2011.
States used the ARRA enhanced Medicaid funding to address Medicaid funding shortfalls during the economic downturn, and to mitigate program cuts and address budget shortfalls. As national unemployment has increased in recent years and the number of uninsured Americans has continued to grow, Medicaid has played an important role in providing coverage to many people, especially children, who otherwise would be uninsured.
The loss of enhanced federal revenues means increases in the state share of Medicaid for all states, increases that are particularly significant in states that continue to experience high unemployment. In these states, the loss of federal fiscal relief makes economic recovery more difficult and increases the pressure to reduce Medicaid spending despite large caseloads driven by high unemployment.
Fact Sheet (.pdf)