How much Fed money is heading our way due to coronavirus?

Wisconsin's Legislative Fiscal Bureau has recently released a few summaries of the recent coronavirus-related action in Congress, and I wanted to go over a few of these items to give you an indication of what might be coming our way.

The first $8.2 billion bill was signed by President Trump 2 weeks ago, and the state is set to receive at least some

Of the total, $2.2 billion is budgeted for the U.S. Centers for Disease Control and Prevention (CDC), with the requirement that CDC provide at least $950 million to fund grants to, or cooperative agreements with, states, localities, territories, and tribes to carry out surveillance, epidemiology, expanding laboratory capacity, infection control, mitigation, communications, and other preparedness and response activities. CDC may use this funding to support eligible state expenses incurred beginning in January, 2020. The federal act requires that half of the funding allocated for local activities ($475 million) be allocated within 30 days of the enactment of the bill.

Further, the act specifies that every grantee that received a public health emergency preparedness grant for federal fiscal year (FFY) 2018-19 will receive at least 90 percent of that grant level from funding authorized in P.L. 116-123. As Wisconsin's FFY 2018-19 public health emergency preparedness grant award was approximately $11.3 million, Wisconsin will receive at least $10.2 million due this provision. Grantees are required to submit a spending plan for this allocation no later than 45 days after the enactment of the act. In addition, Wisconsin will receive $0.5 million as part of funding targeted to jurisdictions with the largest burden of response and preparedness to date and $0.5 million to begin surveillance.

DHS does not require additional authority from the Legislature, either through enactment of legislation or approval by the Joint Committee on Finance, in order to administer the funding the state receives under the federal legislation.

That money will come in handy, as Wisconsin only has $500,000 a year in grants that it can give out to local governments to fight communicable diseases. I also note the last paragraph, because the GOP-dominated Joint Finance Committee does not have to meet and sign off (or reject) any plans that the Evers Administration may have in handling this estimated $11.2 million for the public health emergency, and it can be used right away.

The state also will get its share of federal funds in the second coronavirus bill signed into law, which happened last week. Wisconsin is around 1.8% of the US population, so take that to give yourself an idea on how much more will be flowing into our state via most of these programs. .

But the biggest change in Wisconsin's finances in the COVID-19 bills that have passed to this point involve significant increases in Medicaid funding from the Feds.

Increase to the Federal Medicaid FMAP and the Impact on MA Program Budget. H.R.6201 would increase the FMAP by 6.2 percentage points during any calendar quarter for which a federal public health emergency is in effect, provided the state meets certain requirements (described below). The U.S. Department of Health and Human Services (DHHS)Secretary declared a public health emergency, retroactive to January 27, 2020. Consequently, the enhanced FMAP would apply, at a minimum, during the first quarter of 2020 (January to March of 2020), and would continue until the end of the calendar quarter during which the public health emergency declaration order is terminated.

Under the MA program,the FMAP determines the percentage of eligible benefit costs that are paid by the federal government. Currently, the state's FMAP is 59.36%, meaning the state pays 40.64% of eligible MA benefit costs. As a result of the H.R. 6201, the state's FMAP would increase to 65.56%, decreasing the state's share to 34.44%. At current MA spending levels, this increase to the state's FMAP would shift approximately $150 million of state GPR costs to federal funds for each quarter that the federal public health emergency is in effect, or approximately $600 million for a full year. Therefore, without any changes to total program costs, the state would realize GPR savings relative to the current GPR budget for the program.

Well, $600 million in savings to Medicaid would add quite a bit to our already-large budgetary cushion. Except that the LFB notes that Wisconsin is going to be spending a lot more than what they expected a few months ago.

However, the net impact on the state GPR budget for MA would ultimately depend upon the impact of the COVID-19 epidemic on the MA program. The epidemic will likely affect MA expenditures in two ways. First, MA costs will increase as a result of treatment rendered to individuals contracting the disease. Second, the epidemic will have economic impacts resulting in a loss of income and employment for some households. As a consequence, MA enrollment is likely to increase in the coming months as more individuals become eligible for the program. While the health system costs associated with treating COVID-19 illness will eventually subside, the economic impacts of the epidemic, along with its effect on MA program enrollment, may last longer than the public health emergency.

Translation - Yes, the state would save money from the Feds covering more of the cost of Medicaid. But there are likely to be a whole lot more people ON Medicaid due to the massive amounts of layoffs and other reasons incomes will drop in the coming months. And because of COVID-19, a lot of those people will be sicker, and will cost more to treat.

That being said, there is one area of services where Wisconsin gets the Feds to cover 100% of the costs of Medicaid - testing for COVID-19 and "in vitro diagnostic products for the detection of the virus that causes COVID-19." But that doesn't necessarily cover the treatment if someone is stricken with COVID-19, so the higher cost problem still exists.

Put those figures together, and it sure makes upping our percentage of Fed coverage of 90-96.2% through taking expanded Medicaid seem like a much better deal for the coming year. Especially since we'll likely need to save all the state tax dollars that we can due to revenue losses from the layoffs and the crashing stock market.

One last place that Wisconsin is set to get extra funding is related to the vulnerable groups that get services under Title III of the Older Americans Act.

Title III of the act authorizes grants for state and community programs on aging. In federal fiscal year 2019-20, the total federal funding amount allocated for services funded under Title III was approximately $1.314 billion, of which Wisconsin's allocation was approximately $23.8 million (approximately 1.8% of the total).

The federal legislation would provide an additional $250 million to increase funding for home-delivered nutrition services ($160 million), congregate nutrition services ($80 million), and nutrition services for Native Americans ($10 million). Based on the current federal fiscal year allocation of these funds, it is estimated that Wisconsin would receive approximately $4.5 million in additional federal funds under Title III.

Not bad, but then again, a whole lot more people are likely to need these types of services as we go forward, especially as a large amount of Wisconsinites are basically required to stay at home for the coming weeks.

Of course, the real big check from the Feds will happen in the near future, assuming Congress can eventually agree on some kind of $1-$2 trillion stabilization bill. And you can bet there will be a whole lot more than the LFB will have to sift through after the dust settles on that one.