The Consolidated Appropriations Act, 2023 (CAA) delinked the continuous enrollment provision from the public health emergency (PHE), ending continuous enrollment on March 31, 2023. The enhanced federal matching funds do not apply to administrative expenses or to Medicaid spending that is already subject to an increased match, including spending for ACA expansion adults (the FMAP is 90% for adults eligible through expansion). The increased FMAP was retroactive to Januand generally applied to Medicaid spending that would otherwise reimbursed at the state’s regular FMAP. States received a 6.2 percentage point FMAP increase in exchange for keeping individuals continuously enrolled during the pandemic as authorized by the Families First Coronavirus Response Act (FFCRA). What was the purpose of the enhanced federal Medicaid match rate? How much state Medicaid spending increases as the enhanced FMAP phases down and is ultimately eliminated next year will depend on how many and how quickly people are disenrolled, how many new people come on to Medicaid, and how spending per person in the Medicaid program will change. The phase down of the enhanced FMAP was designed to provide continued financial support to states during the unwinding process and to mitigate sharp increases in state Medicaid spending.Even with lower enrollment, state spending will likely increase as the enhanced FMAP expires. Although the magnitude is uncertain, significant decreases in Medicaid enrollment are expected during the unwinding of the continuous enrollment provision, which will result in lower Medicaid spending.We estimate states received over $117 billion from the increased FMAP during the continuous enrollment period, with enhanced federal funds comprising a larger share of total Medicaid spending in states that had not adopted Medicaid expansion through the Affordable Care Act (ACA).With the substantial enrollment growth, total spending increased, including significant increases in federal Medicaid spending due to the enhanced FMAP. State spending dipped below pre-pandemic levels even as Medicaid enrollment increased by 23 million during the continuous enrollment period.This brief examines how Medicaid spending changed during the continuous enrollment period and estimates the amount of enhanced federal funding states received during the continuous enrollment period. While there remains a great deal of uncertainty as to how Medicaid enrollment will change during the unwinding, the end of the Medicaid continuous enrollment provision and enhanced FMAP are expected to have a significant impact on Medicaid enrollment and spending. Beginning April 1, 2023, states could begin disenrolling individuals from Medicaid, but phased-down federal matching funds will be available through the end of the year if states comply with certain rules. A recent KFF analysis estimated that over 23 million people gained Medicaid coverage during the continuous enrollment period. For a three-year period, states provided continuous enrollment in Medicaid in exchange for an increase in the percentage of Medicaid spending that is paid for by the federal government (the Federal Medical Assistance Percentage or “FMAP”).
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