June 27, 2019 – Moody’s Investor Service said today that the Supreme Court’s June 27 decision did not fully rule out the possibility of a citizenship question being included in the 2020 census form. If this were to materialize either through further court action or through “legal maneuvering” (Moody’s verbiage, not BuyMuni’s) by the Trump administration, states may lose federal medicaid matching funds due to population under-counting.

U.S. agencies use census data to determine eligibility for programs using a population threshold and allocate federal funds. Medicaid is the largest federal program impacted, followed by the Supplemental Nutrition Assistance Program (SNAP). Census information is also factored into various federal subsidies for transit, housing and education programs.

In terms of the theoretical impact of census under-counting, using Urban Institute data, Moody’s believes nine states will lose Medicaid matching funds because of undercounts – Texas (by ~$200 million), Florida (nearly $50 million), followed by Georgia, New Mexico, Nevada, Arizona, Louisiana, Mississippi and Hawaii.

High income states like California and New York are expected to experience population under-counting in the event of a citizenship question be included, but high-income states receive a lower Medicaid reimbursement rate so any under-counting may have a neutral effect for monies transferred from the feds to state/local governments.

According to Moody’s, more than half the states will enjoy an increased Medicaid reimbursement, with the largest gainers being Pennsylvania and Ohio.

Contact Moody’s at +1 (212) 553-1653 to learn more or request a full report.

Contact Kyle Skinner at KSkinner@BuyMuni.com.