Since the COVID-19 crisis began, Utah’s fiscal health has gone quickly from excellent to worrisome. Recent budget forecasts estimate an $850 million shortfall in tax revenue compared to prior estimates made before the arrival of the pandemic. The Utah Legislature has already had to make difficult cuts to the budget, and we are not alone. All of the states are facing similar difficult reductions in the tax revenues they collect, with the consequence of having to cut deeply into needed education and social programs.
Since the economic devastation of the virus began to come clear in March, Congress has passed several relief packages to combat the harmful impacts that COVID-19 has had on our nation. There has been vast aid to small and large businesses, including targeted aid to specific industries such as airlines and hospitals. There has been more help given to individuals and families through direct payments and expanding unemployment benefits and qualifications. This aid has served an important role in limiting the economic damage caused by the virus, but so far, very little of the federal aid effort has been directed to the other hard-hit entity — state budgets.
Over the next few months, Congress will consider whether to pass an additional aid package to blunt the terrible effects on the economy. As legislators in Utah, tasked with the responsibility of balancing our budget while still providing basic state services, we call upon our Utah federal delegation, and Congress as a whole, to please consider a relief package directed specifically to the states. We ask in particular that they consider a temporary increase to the federal Medicaid matching rate (a deal states have where the federal government pays for roughly 70% of the Medicaid program, while states pay 30%).
If Congress is willing to consider providing additional relief to the states, a temporary increase to the Medicaid match rate has a lot of advantages. The rules by which federal matching funds are disbursed to states to pay for their Medicaid programs are already well understood by all parties involved. A temporary increase to the match rate would allow states to receive this fiscal relief largely in proportion to the number of people in their state who recently qualified for the Medicaid program because of unemployment, or other loss of income due to the recession. In this way, the states could get the help they desperately need without creating a new government program or bureaucracy.
Medicaid has a long track record as a federal-state partnership which provides health care to children, the disabled, and the poor. Because of the federal matching portion, it has a history of helping both state budgets and individuals who have lost their jobs in times of economic crisis. During the Great Recession of 2008, increased Medicaid funding played a vital role in helping communities get back on their feet and helping states close budget gaps, save jobs and reduce the uninsured rate.
Giving Medicaid another boost in federal funding would provide an estimated additional $320 million in fiscal relief and essential health care funding for Utah, which would substantially decrease our projected $850 million budget shortfall. Funding Medicaid would also provide targeted, efficient funding, with strict oversight and minimal administrative cost by using the existing federal-state partnership rather than trying to create new ways of getting money to states. The funds would fill specific community needs, and boost an already successful program with a history of helping to improve public health.
The COVID-19 crisis is impacting every aspect of our society, and relief must not only meet the needs of struggling businesses and individuals, but state and local governments trying to stay afloat as well. Medicaid is built for this. Increased federal funding will benefit our most vulnerable neighbors and our most vulnerable state programs at the same time.
Rep. Ray Ward, R-Bountiful, Rep. Suzanne Harrison, D-Draper, Rep. Marsha Judkins, R-Provo, Rep. Jen Dailey-Provost, D-Salt Lake City, and Rep. Stewart Barlow, R-Fruit Heights, are members of the Utah House of Representatives.
