[Congressional Record Volume 145, Number 18 (Tuesday, February 2, 1999)]
[Extensions of Remarks]
[Pages E116-E117]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




THE HAWAII FEDERAL MEDICAL ASSISTANCE PERCENTAGE ADJUSTMENT ACT OF 1999

                                 ______
                                 

                         HON. NEIL ABERCROMBIE

                               of hawaii

                    in the house of representatives

                       Tuesday, February 2, 1999

  Mr. ABERCROMBIE. Mr. Speaker, I rise today to re-introduce 
legislation to adjust the State of Hawaii's Federal medical assistance 
percentage [FMAP] rate. The intent of this bill is to more fairly 
reflect the ability of the state to bear its share of Medicaid 
payments. I am happy to have my colleague, Representative Patsy Mink, 
as a cosponsor of this measure. I am also pleased that our Hawaii 
Senators, Senator Daniel Akaka and Senator Daniel Inouye, have 
introduced similar legislation in the Senate, S. 264.
  The FMAP, or Federal share of the medical assistance expenditures 
under each state's Medicaid program, is determined annually by a 
formula that compares a state's average per capita income level with 
the national income average. States with a higher per capita income 
level are reimbursed a smaller share of their Medicaid costs. By law, 
the FMAP cannot be lower than 50 percent nor higher than 83 percent. In 
1997, the FMAPs varied from 50 percent to 77.2 percent, with Hawaii 
receiving the lowest 50 percent rate.
  Alaska was another state receiving the lowest FMAP rate in 1997. 
However, in the Balanced Budget Act of 1997, a provision increasing 
Alaska's FMAP rate to 59.8 percent for the next 3 years was included. 
Language in the Balanced Budget Act also mentioned that the same 
conditions warranting an increase in Alaska's FMAP rate applied to the 
State of Hawaii. The legislation that I am introducing today would 
conform Hawaii's rate with Alaska's. This bill would increase Hawaii's 
FMAP rate from 50 percent to 59.8 percent.
  The rationale for the FMAP change is quite simple. Hawaii's high cost 
of living skews the per capita income determining factor. Based on 1995 
United States Census data, the cost of living in Honolulu is 83 percent 
higher than the average of the metropolitan areas. More recent studies 
have shown that for the state as a whole, the cost of living is more 
than one-third higher than the rest of the United States. In fact, 
Hawaii's Cost of Living Index

[[Page E117]]

ranks as the highest in the country. If per capita income is measured 
in real terms, the State of Hawaii ranks 47th at $19,755 compared to 
the national average of $24,231 (according to the twenty-first edition 
of ``The Federal Budget and the States,'' a joint study conducted by 
the Taubman Center for State and Local Government at Harvard 
University's John F. Kennedy School of Government and the office of 
Senator Daniel Patrick Moynihan). Thus, Hawaii's 50 percent FMAP rate 
is understated because cost of living factors are not considered. Per 
capita income is a poor measure of Hawaii's relative ability to bear 
the cost of Medicaid services.
  Some government programs take the high cost of living in Hawaii into 
account and funding is adjusted accordingly. These programs include 
Medicaid prospective payment rates, food stamp allocations, school 
lunch programs, housing insurance limits, Federal employee salaries, 
and military living expenses. These examples show a Federal recognition 
that the higher cost of living in noncontiguous states should be taken 
into account in fashioning government program policies. It is time for 
similar recognition of this factor in gauging Hawaii's ability to 
support its health care programs. It is time to pass my bill increasing 
Hawaii's FMAP from 50 percent to 59.8 percent.
  Setting a higher match rate as was done for Alaska would still leave 
Hawaii with a lower FMAP rate than a majority of the states. However, 
the higher rate would better recognize Hawaii's ability to pay its fair 
share of the costs of the Medicaid program and I am committed to 
achieving it.

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