Issue Briefs | Apr 1, 2021

Assessing Enhanced Federal Funding for HCBS Under the American Rescue Plan Act

Stephanie Anthony and Alixandra Gould, Manatt Health

On March 11, 2021, President Biden signed the American Rescue Plan Act into law, enacting a sweeping $1.9 trillion COVID-19 relief package. The legislation includes a number of provisions that will significantly impact state and federal health care policies and programs, including enhanced federal funding for state Medicaid spending on home- and community-based services (HCBS). Beginning April 1, 2021 and through March 31, 2022, states will be eligible to receive a 10 percentage point increase in their federal medical assistance percentage—the share of state Medicaid spending that is paid for by the federal government—for specified HCBS. This brief describes ARPA’s HCBS FMAP increase provision, the requirements for states receiving the enhanced federal funding, and considerations and next steps for state policymakers.