March 11, 2009
STATEWIDE: The American Recovery and Reinvestment Act of 2009 (public law 111-5) was signed into law by President Barack Obama on February 17, 2009. Referred to more commonly as the Economic Stimulus Act, the new law contains a number of provisions that affect the elderly and disabled of Massachusetts.
The new law touches many areas, from additional DTV converter boxes, to more funds for processing disability and retirement claims at Social Security offices. But the two largest outlays of new funds for the elderly and disabled are the one-time payments of $250 to almost everyone on programs like Social Security, VA benefits, and SSI---plus an increase in federal matching funds for Medicaid.
The $250 payment program will bring in more than $306.5 million to 1.226 million Massachusetts residents, and the Medicaid matching funds could total more than $3 billion to the Commonwealth over the next couple of fiscal years, according to Mass Home Care.
The final version of the ARRA was over 1,000 pages, and includes health-related provisions, tax cuts, appropriations, and other provisions. Here are some of the key provisions that affect the elderly and individuals with disabilities:
- Extends the Medicare Qualified Individuals (QI) program through December 31, 2010. Under QI, the MassHealth program pays for the Part B premiums ($96.40 per month) for eligible Medicare recipients between 120 and 135% of poverty. These recipients are also eligible for the Medicare Part D (drug) Low Income Subsidy.
- Provides a one-time $250 payment to almost everyone on Social Security, SSI, and/or Railroad Retirement Benefits, and Veterans, Disability Compensation or Pension Benefits—as long as they received a benefit in November or December of 2008, or January, 2009. These payments will total $14 billion in 2009, equivalent to 56 million recipients nationwide. In Massachusetts, a total of 1,226,000 people will get this payment, for a total benefit of $306.5 million coming into the state. These payments will be made by the first week in June. The Social Security Administration is making the payments automatically. The one-time payment will be made separately from the regular monthly benefit payments as a direct deposit, or a mailed check. These payments are not taxable income, and will require not require the filing of a tax return.
- Temporary Increase in Matching Money for Medicaid:The ARRA provides a temporary increase in the share of the Medicaid program paid by the federal government (known as the Federal Medical Assistance Percentage or “FMAP”). The provision will take effect immediately and provide states with approximately $87 billion in assistance over nine calendar quarters (October 1, 2008 through December 31, 2010). There are three components: 1) each state will be “held harmless” from any drop in its FMAP rate that would otherwise occur under the regular FMAP formula as a result of an increase in its per capita income in years prior to the recession. (States with higher incomes have lower FMAP rates than states with lower incomes.) 2) each state will receive a “base” 6.2-percentage-point FMAP increase. 3) states that are experiencing large increases in their unemployment rates — as most states are — will receive an additional FMAP increase, that would proportionally reduce the states’ share of Medicaid costs by 5.5 %, 8.5%, or 11.5%, depending on the size of the increase in unemployment. Each state’s eligibility for this additional FMAP increase would be evaluated each quarter based on the most recent unemployment data, with states qualifying for a greater level of assistance if their economic situation worsens. No state would lose this higher FMAP rate if its unemployment dropped before July 1, 2010. The FMAP increases would apply to the costs of some Medicaid benefits. To receive an increased FMAP under this proposal, a state must satisfy two requirements. First, a state may not have Medicaid eligibility levels that are more restrictive than were in effect on July 1, 2008. States whose current eligibility levels do not meet this test would still be eligible to qualify for an increased FMAP if they take action to restore eligibility to July 2008 levels. Second, a state must ensure that it is promptly paying physicians, hospitals, and nursing homes that provide Medicaid services. This FMAP provision is expected to generate $3.09 billion to the Commonwealth during FY 2009 to 2011.
- Food Stamp Program:The economic recovery package includes $20 billion for the Food Stamp Program (recently renamed the Supplemental Nutrition Assistance Program). Most of this amount (about $19 billion) would be used to fund a 13.6% increase to maximum food stamp benefits, which would go into effect in April 2009. The new level will stay in place in subsequent years until the program’s regular annual inflation adjustments overtake the benefit increase. All food stamp households — currently about 14 million households containing more than 31 million individuals — will benefit from the increase. Food stamps are one of the most effective forms of economic stimulus because low-income individuals generally spend their available resources on meeting their daily needs, such as shelter, food, and transportation. Therefore, every dollar in food stamps that a low-income family receives enables the family to spend an additional dollar on food or other items. USDA research has found that $1 in food stamps generates $1.84 in total economic activity. The package also would provide $290.5 million in administrative funds to states to implement the change and help manage rising caseloads during the recession (another $4.5 million would go to USDA for administrative costs), suspend for 18 months the three-month time limit on assistance that many unemployed childless adults face. The Food Stamp provisions in the ARRA will benefit a total of 575,000 food stamp beneficiaries, bringing an additional $317 million into the Massachusetts economy from 2009 to 2013.
- Older Americans Act Nutrition funds:A total of $100 million in senior nutrition programs are included in the ARRA. Of that amount, $65 million is for congregate mealsites, and $32 million is for home-delivered meals. $3 million is for Native American nutrition programs. This funding will be available immediately, and no time period is required for spending the funds. For Massachusetts, this means approximately $1.57 million in new funds for mealsites, and $696,000 for home-delivered meals.
“These stimulus payments will not make the recession vaporize,” said Al Norman, the Executive Director of Mass Home Care, “but for more than a million of our low-income elderly and individuals with disabilities, it will provide some tangible relief. The food stamp and meals on wheels increases are definitely targeted to people who really need the help.”
Norman said it was not clear yet how the Medicaid matching funds would be used by the state, but one of the largest line items in the Medicaid budget is long term care for the elderly. “We’re hoping some of that money will find its way into care at home,” Norman said. “That’s where elders want to be, and the stimulus money should follow the people.”
Data compiled by Mass Home Care from: Center on Budget & Policy Priorities, National Council on Aging, and other sources.