8% FMAP Boost: Impact on IDD Providers

Senator Bernie Sanders and Congressman Ro Khanna on March 2, 2026 announced the “Make Billionaires Pay Their Fair Share Act,” describing it as a 5% annual wealth tax on households with net worth above $1B and directing receipts to several initiatives, including health care. For intellectual and developmental disabilities (IDD) providers and other home and community-based services (HCBS) stakeholders, the bill’s HCBS package is the most material section, particularly its proposed Medicaid financing changes and the conditions attached to enhanced federal support.

What the bill proposes for HCBS

The bill text proposes an 8 percentage-point increase to state Federal Medical Assistance Percentage (FMAP) for Medicaid “home and community-based services” spending for qualifying states and quarters. The proposal includes a cap so FMAP does not exceed 95% for the relevant expenditures. It also outlines an additional +2 percentage-point FMAP increase for the first six fiscal quarters when a state implements a qualifying self-direction support program under the bill’s conditions. The bill cites examples such as “agency with choice” type functions. The proposal also includes federal funding to develop HCBS quality measures. The bill specifies that this development would occur in consultation with recipients and providers.

Funding tied to accountability

The enhanced FMAP is not positioned as unconditional. The bill text links the additional funding to requirements that could shift state-provider dynamics through maintenance-of-effort concepts, access-improvement requirements, and workforce provisions. Those workforce and rate-related provisions include adopting processes to ensure HCBS payment rates are sufficient, updating payment rates at least every 3 years, and ensuring rate increases translate into at least a “proportionate” increase to direct care worker payments.

This proposal arrives in a policy environment shaped by the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, which the American Medical Association (AMA) and RAND summarize as imposing Medicaid eligibility and administrative changes along with financing constraints. RAND estimates significant federal and state budget impacts and enrollment reductions through 2034 under key provisions.

Operational considerations for IDD providers

The bill’s geographic scope is broad, potentially affecting Medicaid HCBS users across disability groups, including IDD, and the HCBS direct-care workforce. The bill references direct support professionals (DSPs), personal care attendants, home health aides, and others as defined in the bill. Operationally, agency leadership may view the proposal as a high-signal policy direction even ahead of passage because it points to “accountability hooks” that could become more common. The text signals expectations around rate transparency, pay-through expectations, access metrics, and quality measurement, all of which could require new reporting capabilities.

Financially, if enacted, the 8-point FMAP lift on HCBS expenditures could materially improve state fiscal capacity. The impact for providers, however, would depend on whether states use the funding to strengthen provider rates and capacity rather than substituting for existing state spending. The bill explicitly references non-supplantation mechanics, suggesting guardrails around whether enhanced federal dollars truly “flow through” to service capacity.

From a compliance perspective, the bill leans toward a future where workforce investments are auditable. The “proportionate increase” concept and the required rate-review cadence would likely increase documentation expectations for providers and states, including wage data, turnover, vacancy, recruitment timelines, and service authorization-to-fill metrics. Workforce impact could be positive if pay-through expectations become real, creating policy leverage for agencies to negotiate rates and justify wage ladders tied to recruitment and retention realities, particularly for DSP positions that are hard to staff.