H.R. 3321 — Ending Medicaid Discrimination Against the Most Vulnerable Act

This section modifies the enhanced Federal medical assistance percentage (FMAP) available to states under Medicaid for medical assistance provided to newly eligible individuals (i.e., adults with family incomes up to 138% of the federal poverty level previously ineligible for full Medicaid benefits). (As background, under current law, such states receive a 90% FMAP for calendar quarters in 2021 and each year thereafter.) Specifically, the section (1) limits the enhanced FMAP under section 1905(y)(1) to calendar quarters through 2026 (from each year thereafter); (2) establishes for calendar quarters in 2027 through 2034 an FMAP equal to the prior year's enhanced rate minus the state's applicable number of percentage points (i.e., (90% minus the state's regular FMAP for FY2026) divided by 8), or the state's regular FMAP under section 1905(b), whichever is higher; and (3) sets the FMAP for 2035 and subsequent years at the state's regular FMAP under section 1905(b). The section further provides that, for calendar years after 2024, the enhanced FMAP does not apply to non-expansion states (i.e., states that, before enactment, have not provided coverage to all individuals described in section 1902(a)(10)(A)(i)(VIII)); such states that later expand receive their regular FMAP, while expansion states may elect to limit such coverage to individuals with incomes not exceeding 100% of the federal poverty level and continue receiving the enhanced FMAP for those expenditures. (Thus, the phase-out applies primarily to the 40 states and DC that have fully expanded Medicaid as of 2024.) This section also strikes section 1905(ii), eliminating the temporary FMAP increase of 2.5 percentage points in 2026 and 5 percentage points in 2027 and 2028 for states newly electing to cover such individuals.