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Trump Administration Withdraws Harmful Rule, Ending One Looming Threat to Medicaid

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This week, the Trump administration withdrew a proposed rule that would have interfered with some Medicaid funding, forcing states to cut Medicaid coverage and services. The proposed Medicaid Fiscal Accountability Regulation (MFAR) was purported to increase transparency around certain Medicaid funding which the administration said needed to be studied. The proposal, however, did not study certain funding mechanisms but ended them and was widely denounced by states, health care providers, and people with Medicaid and their advocates.

Over 12 million people with Medicare also rely on Medicaid. These individuals often have very high rates of chronic illness and may have extensive long-term services and supports needs that can only be met through Medicaid. With Medicaid’s help, they can often stay in their homes and communities safely. But many experts flag the services that keep people safely at home as the most at risk from state budget cuts, which could lead to many people being forced to leave their homes and enter nursing facilities, increasing their risk of contracting COVID-19.

Importantly, Medicaid funding generally is already at risk. States face budgetary shortfalls because of simultaneous economic slowdowns and spikes in enrollment related to the pandemic. This makes it an especially dangerous time to limit Medicaid funding. Even the administration was unsure just how much impact the rule would have. The proposal stated that “The fiscal impact on the Medicaid program from the implementation of the policies in the proposed rule is unknown.”

Especially during the COVID-19 public health emergency, proposals that would cut some unknown amount from Medicaid budgets is simply too risky. We applaud the administration for withdrawing the rule and recognizing that further study is needed before any similar change is made. We must ensure that people with Medicaid are not at risk of losing access to needed services and providers through funding or other changes.

Read Medicare Rights’ comments in response to the MFAR proposal.

Read more about the withdrawal of the MFAR proposal.

Read more about Medicaid financing.

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