However, some economists and forecasters had been concerned that a combination of factors might make this economic contraction much worse than other post-war slowdowns. The problems that began in housing, quickly spread to banking and financial services and were compounded earlier in 2008 by spikes in energy prices. In response, policymakers quickly moved to prevent the instability in housing and financial services from spilling over into the broader economy. Some economic stimulus proposals included infrastructure spending, revenue sharing with states, middle class tax cuts, business tax cuts, unemployment benefits, and food stamps. On January 22, 2009 the House Committee on Energy and Commerce marked-up selected health components and approved a stimulus bill, the American Recovery and Reinvestment Act of 2009 (ARRA, H.R. 1 on January 28, 2009. An amendment in the nature of a substitute ( S.Amdt. 1 and was approved by the full Senate on February 10, 2009. The Senate version of ARRA was referred to a joint Senate and House conference committee. The conference committee reached agreement and referred ARRA to the House and Senate, where it was passed on February 13, 2009. President Obama signed ARRA ( P.L. 111-5 ) on February 17, 2009. This report is a summary the Medicaid provisions in P.L. For more information on the Medicaid provisions included in House and Senate versions of ARRA, see CRS Report R40158, Medicaid Provisions in the House and Senate American Recovery and Reinvestment Act of 2009 (ARRA, H.R. 1, S.Amdt. 570) , coordinated by [author name scrubbed]. For further information on implementation of the FMAP adjustments in ARRA, see CRS Report RL32950, Medicaid: The Federal Medical Assistance Percentage (FMAP) . Under the Jobs and Growth Tax Relief Reconciliation Act of 2003 ( P.L. To receive the increase, states are:
required to maintain their Medicaid eligibility standards, methodologies, and procedures as in effect on July 1, 2008; prohibited from receiving the increase if they are not in compliance with requirements for prompt payment of health care providers under Medicaid, and required to report to the Secretary of HHS on their compliance; prohibited from depositing or crediting the additional federal funds paid as a result of the increase to any reserve or rainy day fund; required to ensure that local governments do not pay a larger percentage of the state's nonfederal Medicaid expenditures than otherwise would have been required on September 30, 2008; and required to submit a report to the Secretary regarding how the additional federal funds paid as a result of the temporary FMAP increase were expended. Funding for Oversight and Implementation.
The economy officially was considered in a recession in December 2008, but many forecasters had long recognized the downturn and some believed this economic contraction would be more severe than other post-World War II slowdowns. A combination of factors combined to present policymakers with difficult decisions on how best to stimulate the economy. Troubling instability in the housing and financial services sectors, weak auto manufacturing demand, and high energy costs earlier in 2008 had slowed growth dramatically and forced millions into unemployment. With declining tax revenue and increasing costs to provide unemployment and other benefits to unemployed workers, states were implementing measures to rein in spending, including restricting Medicaid eligibility and services.
Congress considered legislation aimed at stimulating economic activity in selected industrial sectors to save existing and create new jobs, reduce taxes, invest in future technologies, and fund infrastructure improvements. In addition to reducing some taxes and funding infrastructure projects, ARRA provisions were designed to provide: temporary support to families and individuals by increasing unemployment compensation benefits; financial assistance for individuals to maintain their health coverage under provisions in the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA); temporary increases in Medicaid matching rates; and increases in disproportionate share hospital allotments.
The House approved the American Recovery and Reinvestment Act of 2009 (H.R. 1) on January 28, 2009. The Senate passed an amendment (S.Amdt. 570) as a replacement for the House-approved version of ARRA on February 10, 2009. ARRA was referred to a joint House and Senate conference committee. The joint Senate and House Conference Committee reached agreement, and ARRA was passed by the House and Senate on February 13, 2009. President Obama signed ARRA (P.L. 111-5) into law on February 17, 2009. This report is a summary of ARRA's Medicaid provisions.
For more information on the Medicaid provisions included in House and Senate versions of ARRA, see CRS Report R40158, Medicaid Provisions in the House and Senate American Recovery and Reinvestment Act of 2009 (ARRA, H.R. 1, S.Amdt. 570), coordinated by [author name scrubbed]. This report will not be updated. For further information on implementation of FMAP changes in ARRA, see CRS Report RL32950, Medicaid: The Federal Medical Assistance Percentage (FMAP).