The federal fiscal year 2023 consolidated appropriations act (passed by Congress on Dec. 23 and signed by the president on Dec. 29) includes a final deadline for the enhanced federal match for Medicaid that has been in place since early in the pandemic. Because this enhanced federal match supplants state funds for Medicaid, Washington has booked over a billion dollars in general fund–state (GFS) savings over the past few years.

The federal Families First Coronavirus Response Act, enacted in March 2020, provided an enhanced federal match for Medicaid. The federal government and the states share funding responsibility for Medicaid; for Medicaid expenses in Washington, the state typically pays 50% and the federal government pays 50%. The enhancement increased the federal share by 6.2%. In exchange, states may not end coverage for enrollees who otherwise become ineligible.

These changes were to be in effect until the end of the federal public health emergency. The emergency is still in place and was most recently renewed on Oct. 13, 2022. The November 2022 caseload forecast assumed that the emergency would end Jan. 11, 2023, after which Medicaid caseloads would drop as eligibility is redetermined. Gov. Inslee’s 2023 supplemental budget proposal assumes that the enhanced match would end June 30, 2023. As a result, his proposal books GFS savings of $562.3 million in 2021–23.

Now, the federal appropriations act for FY 2023 (see p. 1491) amends the Families First Coronavirus Response Act to repeal the enhanced match on Dec. 31, 2023. Additionally, the enhanced match will be phased down. It will be:

• 6.2% through March 31, 2023,
• 5.0% for April 1–June 30, 2023,
• 2.5% for July 1–Sept. 30, 2023, and
• 1.5% for Oct. 1–Dec. 31, 2023.

States may begin to reevaluate eligibility on April 1, 2023.

This means that Washington will not save as much in 2021–23 as assumed in Gov. Inslee’s budget proposal, but it also means that some level of state savings will accrue in 2023–25 (which is unanticipated in Gov. Inslee’s proposal). The new, firm deadline also provides some certainty for legislative budget writers.

I haven’t seen a full accounting of how much Washington has saved thanks to the enhanced federal match. But adopted state budgets have assumed that the savings to Washington would be $546.2 million in the 2021 supplemental, $289.9 million in the original 2021–23 biennial budget, and $309.5 million in the 2022 supplemental.