How the Families First Coronavirus Response Act Affects State Medicaid Programs

Last week, the Families First Coronavirus Response Act was signed into law to provide additional resources to help states address the effects of COVID-19. The law eliminates patient cost sharing for COVID-19 testing and related services in most forms of health coverage, it establishes an emergency paid leave program, extends sick leave benefits, and expands unemployment and nutrition assistance. It also includes additional funding for different agencies and offices within the US Department of Health and Human Services as well as funding for the Public Health and Social Services Emergency Fund.

Specifically for Medicaid, the law:

• Prohibits cost sharing for COVID-19 testing and testing-related services during the public health and national emergency period.
• Provides states with the option to extend Medicaid eligibility to uninsured individuals, specifically to provide coverage for COVID-19 diagnostic testing and testing-related services during the public health emergency period. If states choose this option, their related medical and administrative costs for this would be fully matched by the federal government. States can also receive payment for out-stationed eligibility workers and the use of streamlined applications for uninsured individuals covered by this provision.
• It includes an increase in federal Medicaid funds to states and territories by providing a temporary and retroactive 6.2 percentage point increase in the regular Medicaid matching rate. The temporary increase in the Federal Medical Assistance Percentage (FMAP) would last through the final day of the calendar quarter when the emergency period ends. However, in order to receive the increased FMAP, states would be required to meet certain conditions:
  • States would need to maintain Medicaid eligibility standards, methodologies and procedures that are no more restrictive than those that were in place as of Jan. 1, 2020;
  • States can also not charge higher premium amounts than those in place as of Jan. 1, 2020;
  • States must continue to provide benefits to individuals enrolled until the last day of the month when the emergency period ends (unless an individual voluntarily dis-enrolls or moves out of state); and
  • States must provide Medicaid coverage without cost-sharing for COVID-19 testing and treatment, such as vaccines, equipment, and therapies, during the emergency period.

 Guidance for states, along with additional details about implementation of these provisions will be forthcoming from the Centers for Medicare & Medicaid Services.