Here is a news brief from Greg Hunt, DHHS liaison/Federal Legislative Analyst in Washington:

As the annual August congressional recess approaches, one of the issues still to be resolved is whether to extend into the first six months of 2011 a temporary increase in federal contributions to states for Medicaid funding. This provision was enacted as part of the 2009 American Recovery and Reinvestment Act (ARRA), which prevented anticipated reductions in federal contributions to state budgets and provided increased additional contributions to states that had significant unemployment.

A recent Health Affairs Policy Brief examines the following:

· How the federal contribution to states, known as the federal medical assistance percentage (FMAP) is normally calculated.

· How the additional FMAP contributions have helped offset state deficits, since most state budgets by law must be balanced.

· Proponents' and opponents' views: the necessity to avoid serious harm to state budgets versus the impact on the federal deficit if the additional assistance isn't offset with spending cuts or revenue increases.

· Why Congress is currently deadlocked on the provision, and what might happen to state budgets if the provision is not extended.

You can access the document online at: Click to View.