Medicaid: The Federal Medical Assistance
Percentage (FMAP)
Evelyne P. Baumrucker
Analyst in Health Care Financing
September 24, 2010
Congressional Research Service
7-5700
www.crs.gov
RL32950
CRS Report for Congress
P
repared for Members and Committees of Congress

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Medicaid: The Federal Medical Assistance Percentage (FMAP)

Summary
Medicaid is a health insurance program jointly funded by the federal government and the states.
Historically, eligibility for Medicaid was generally limited to low-income children, pregnant
women, parents of dependent children, the elderly, and people with disabilities; however, recent
changes will soon require coverage for childless adults as well. The federal government’s share of
a state’s expenditures for most Medicaid services is called the federal medical assistance
percentage (FMAP). The remainder is referred to as the nonfederal share, or state share.
Generally determined annually, the FMAP is designed so that the federal government pays a
larger portion of Medicaid costs in states with lower per capita incomes relative to the national
average (and vice versa for states with higher per capita incomes). For FY2011, regular
FMAPs—that is, excluding the impact of a temporary increase—range from 50.00% to 74.73%.
States are currently receiving a temporary FMAP increase that was included in the American
Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5) and later extended by H.R. 1586
(which was signed into law as P.L. 111-226). It runs for 11 quarters, from the first quarter of
FY2009 through the third quarter of FY2011 (i.e., October 2008 through June 2011), subject to
certain requirements. The Administration estimates that the original ARRA provision will
increase federal Medicaid payments to states by about $91 billion, and the Congressional Budget
Office estimates that the six-month extension in P.L. 111-226 will provide an additional $16
billion. Although ARRA FMAPs were originally set to end December 31, 2010, about 30 states
assumed that a six-month extension would be provided when they planned their SFY2011
budgets (most of which began on July 1).
The recently enacted Patient Protection and Affordable Care Act (PPACA, P.L. 111-148, as
amended by P.L. 111-152) also contains a number of provisions that affect FMAPs. Most notably,
it provides FMAPs of up to 100% for certain newly eligible individuals. It also provides—subject
to various requirements—increased FMAPs for certain disaster-affected states, primary care
payment rate increases, specified preventive services and immunizations, smoking cessation
services for pregnant women, specified home and community-based services, and health home
services for certain people with chronic conditions.

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Medicaid: The Federal Medical Assistance Percentage (FMAP)

Contents
Introduction ................................................................................................................................ 1
The Federal Medical Assistance Percentage................................................................................. 1
How FMAPs Are Calculated ................................................................................................. 1
Data Used to Calculate State FMAPs .................................................................................... 2
Factors That Affect FMAPs................................................................................................... 3
Exceptions ............................................................................................................................ 3
Recent Issues and Legislation...................................................................................................... 7
Temporary FMAP Increase in ARRA and Six-Month Extension ............................................ 7
FMAP Changes in the New Health Reform Law.................................................................. 10
Exclusion of Certain Employer Contributions from FMAP Calculations .............................. 12

Tables
Table 1. Exceptions to the Regular FMAP for Medicaid .............................................................. 4
Table A-1. Regular FMAPs, FY2003-FY2011 ........................................................................... 13
Table A-2. Increased FMAPs Under ARRA, FY2009 ................................................................ 15
Table A-3. Increased FMAPs Under ARRA, First and Second Quarters of FY2010 ................... 17

Appendixes
Appendix. Regular and ARRA FMAPs for Medicaid................................................................. 13

Contacts
Author Contact Information ...................................................................................................... 19
Acknowledgments .................................................................................................................... 19

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Medicaid: The Federal Medical Assistance Percentage (FMAP)

Introduction
Medicaid is a health insurance program jointly funded by the federal government and the states.
Although states have considerable flexibility to design and administer their Medicaid programs,
certain groups of individuals must be covered for certain categories of services. Historically,
eligibility was generally limited to low-income children, pregnant women, parents of dependent
children, the elderly, and people with disabilities; however, recent changes will soon require
coverage for childless adults as well. The federal government pays a share of each state’s
Medicaid costs; states must contribute the remaining portion in order to qualify for federal funds.1
The Federal Medical Assistance Percentage
The federal government’s share of most Medicaid service costs is determined by the federal
medical assistance percentage (FMAP), which varies by state and is determined by a formula set
in statute.2 Certain Medicaid services receive a higher federal match. For Medicaid administrative
costs, the federal share does not vary by state and is generally 50%.3
An enhanced FMAP (E-FMAP) is provided for both services and administration under the State
Children’s Health Insurance Program (CHIP), subject to the availability of funds from a state’s
federal allotment for CHIP. When a state expands its Medicaid program using CHIP funds (rather
than Medicaid funds), the enhanced FMAP applies and is paid out of the state’s federal allotment.
The E-FMAP is calculated by reducing the state share under the regular FMAP by 30%.4
How FMAPs Are Calculated
The FMAP formula compares each state’s per capita income relative to U.S. per capita income,
and provides higher reimbursement to states with lower incomes (with a statutory maximum of
83%) and lower reimbursement to states with higher incomes (with a statutory minimum of 50%).
The formula for a given state is:
FMAPstate = 1 - ( (Per capita incomestate)2/(Per capita incomeU.S.)2 * 0.45 )
The use of the 0.45 factor in the formula is designed to ensure that a state with per capita income
equal to the U.S. average receives an FMAP of 55% (i.e., state share of 45%). In addition, the
formula’s squaring of income provides higher FMAPs to states with below-average incomes than
they would otherwise receive (and vice versa, subject to the 50% minimum).5

1 For a broader overview of financing issues, see CRS Report RS22849, Medicaid Financing.
2 The FMAP is also used in determining the phased-down state contribution (“clawback”) for Medicare Part D and the
federal share of certain child support enforcement collections, Temporary Assistance for Needy Families (TANF)
contingency funds, a portion of the Child Care and Development Fund (CCDF), and foster care and adoption assistance
under Title IV-E of the Social Security Act.
3 See CRS Report RS22101, State Medicaid Program Administration: A Brief Overview.
4 See CRS Report R40444, State Children’s Health Insurance Program (CHIP): A Brief Overview.
5 For example, assume that U.S. per capita income is $40,000. In state A with an above-average per capita income of
$42,000, the FMAP formula produces an FMAP of 50.39%; if the formula did not include a squaring of per capita
income, it would instead produce a higher FMAP of 52.75%. In state B with a below-average per capita income of
(continued...)
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

The Department of Health and Human Services (HHS) usually publishes FMAPs for an
upcoming fiscal year in the Federal Register during the preceding November. For example,
regular FMAPs for FY2011 (the federal fiscal year that began on October 1, 2010) were
calculated and published November 27, 2009.6 This time lag between announcement and
implementation provides an opportunity for states to adjust to FMAP changes, but it also means
that the per capita income amounts used to calculate FMAPs for a given fiscal year are several
years old by the time the FMAPs take effect.
At the end of this report, Table A-1 shows regular FY2003-FY2011 FMAPs that are calculated
using the formula described above.
Data Used to Calculate State FMAPs
As specified in Section 1905(b) of the Social Security Act, the per capita income amounts used in
the FMAP formula are equal to the average of the three most recent calendar years of data
available from the Department of Commerce. In its FY2011 FMAP calculations, HHS used state
per capita personal income data for 2006, 2007, and 2008 that became available from the
Department of Commerce’s Bureau of Economic Analysis (BEA) in September 2009. The use of
a three-year average helps to moderate fluctuations in a state’s FMAP over time.
BEA revises its most recent estimates of state per capita personal income on an annual basis to
incorporate revised and newly available source data on population and income.7 It also undertakes
a comprehensive data revision—reflecting methodological and other changes—every few years
that may result in upward and downward revisions to each of the component parts of personal
income (as defined in BEA’s national income and product accounts, or NIPA). These components
include
• earnings (wages and salaries, employer contributions for employee pension and
insurance funds, and proprietors’ income);
• dividends, interest, and rent; and
• personal current transfer receipts (e.g., government social benefits such as Social
Security, Medicare, Medicaid, state unemployment insurance).8
As a result of these annual and comprehensive revisions, it is often the case that the value of a
state’s per capita personal income for a given year will change over time. For example, the 2006
state per capita personal income data published by BEA in September 2008 (used in the

(...continued)
$38,000, the FMAP formula produces an FMAP of 59.39%; if the formula did not include a squaring of per capita
income, it would instead produce a lower FMAP of 57.25%.
6 74 Federal Register 62315 (November 27, 2009), available at http://aspe.hhs.gov/health/fmap11.pdf.
7 Preliminary estimates of state per capita personal income for the latest available calendar year—as well as revised
estimates for the two preceding calendar years—are released in April. Revised estimates for all three years are released
in September.
8 Employer and employee contributions for government social insurance (e.g., Social Security, Medicare,
unemployment insurance) are excluded from personal income, and earnings are counted based on residency (i.e., for
individuals who live in one state and work in another, their income is counted in the state where they reside).
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

calculation of FY2010 FMAPs) differed from the 2006 state per capita personal income data
published in September 2009 (used in the calculation of FY2011 FMAPs).
It should be noted that the NIPA definition of personal income used by BEA is not the same as the
definition used for personal income tax purposes. Among other differences, NIPA personal
income excludes capital gains (or losses) and includes transfer receipts (e.g., government social
benefits), while income for tax purposes includes capital gains (or losses) and excludes most of
these transfers.
Factors That Affect FMAPs
Several factors affect states’ FMAPs. The first is the nature of the state economy and, to the
extent possible, a state’s ability to respond to economic changes (i.e., downturns or upturns). The
impact on a particular state of a national economic downturn or upturn will be related to the
structure of the state economy and its business sectors. For example, a national decline in
automobile sales, while having an impact on all state economies, will have a larger impact in
states that manufacture automobiles as production is reduced and workers are laid off.
Second, the FMAP formula relies on per capita personal income in relation to the U.S. average
per capita personal income. The national economy is basically the sum of all state economies. As
a result, the national response to an economic change is the sum of the state responses to
economic change. If more states (or larger states) experience an economic decline, the national
economy reflects this decline to some extent. However, the national decline will be lower than
some states’ declines because the total decline has been offset by states with small decreases or
even increases (i.e., states with growing economies). The U.S. per capita personal income,
because of this balancing of positive and negative, has only a small percentage change each year.
Since the FMAP formula compares state changes in per capita personal income (which can have
large changes each year) to the U.S. per capita personal income, this comparison can result in
significant state FMAP changes.
In addition to annual revisions of per capita personal income data, comprehensive NIPA revisions
undertaken every four to five years may also influence FMAPs (e.g., because of changes in the
definition of personal income). The impact on FMAPs will depend on whether the changes are
broad (affecting all states) or more selective (affecting only certain states or industries).
Exceptions
Although FMAPs are generally determined by the formula described above, Table 1 lists
exceptions that have been added over the years.

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Table 1. Exceptions to the Regular FMAP for Medicaid
Exception Description
Citations
Territories and Certain States
Territories
FMAPs for the territories (Puerto Rico, American Samoa, the Northern Mariana Islands, Guam, and the Virgin Islands) are currently
Most recently P.L. 111-148, as
set at 50% and, unlike the 50 states and the District of Columbia, the territories are subject to federal spending caps. As of
amended by P.L. 111-152; SSA
7/1/2011, their FMAPs will increase to 55%. The 55% also applies for purposes of computing the enhanced FMAP for CHIP.
§§ 1905(b), 1108(f) and (g)
District of Columbia
As of FY1998, the District’s FMAP is set at 70% (without this exception, it would be at the statutory minimum of 50%). The 70%
P.L. 105-33; SSA § 1905(b)
also applies for purposes of computing the enhanced FMAP for CHIP.
Alaska
Alaska’s FMAP was set in statute for FY1998-FY2000 at 59.80%; used an alternative formula for FY2001-FY2005 that reduced the
P.L. 105-33 § 4725(a); P.L. 106-
state’s per capita income by 5% (thereby increasing its FMAPs); and was held at its FY2005 level for FY2006-FY2007. These
554 Appendix F § 706; P.L.
provisions also applied for purposes of computing the enhanced FMAP for CHIP.
109-171 § 6053(a)
Special Situations
State fiscal relief,
FMAPs for the last two quarters of FY2003 and the first three quarters of FY2004 were not allowed to decline (i.e., were held
P.L. 108-27 § 401(a)
FY2003-FY2004
harmless) and were increased by an additional 2.95 percentage points, providing states with about $10 billion in additional funds
(they also received $10 billion in direct grants). Although Medicaid disproportionate share hospital (DSH) payments are reimbursed
using the FMAP, the increase did not apply to DSH. States had to meet certain requirements in order to receive an increase (e.g.,
they could not restrict eligibility after a specified date).
State fiscal relief,
FMAPs are increased from the first quarter of FY2009 through the third quarter of FY2011, providing states with more than $100
P.L. 111-5 § 5001, as amended
FY2009-FY2011
billion (about $90 billion for the original provision and $16 billion for a six-month extension) in additional funds. All states receive a
by P.L. 111-226 § 201
hold harmless to prevent any decline in regular FMAPs and an across-the-board increase of 6.2 percentage points until the last two
quarters of the period, at which point the across-the-board increase phases down to 3.2 and then 1.2; qualifying states receive an
additional unemployment-related increase. Each territory could choose between an FMAP increase of 6.2 percentage points along
with a 15% increase in its spending cap, or its regular FMAP along with a 30% increase in its cap; all chose the latter. States must
meet certain requirements in order to receive the increase (see text for details).
Adjustment for
In computing FMAPs for any year after 2006 for a state that the Secretary of HHS determines has a significant number of Hurricane
P.L. 109-171 § 6053(b); 72
Hurricane Katrina
Katrina evacuees as of October 1, 2005, the Secretary must disregard such evacuees and their incomes. Although it was labeled as a Federal Register 3391 (January
“hold harmless for Katrina impact,” the provision language required evacuees to be disregarded even if their inclusion would
25, 2007) and 44146 (August 7,
increase a state’s FMAP. Due to lags in the availability of data used to calculate FMAPs, FY2008 was the first year to which the
2007)
provision applied. HHS proposed and finalized a methodology that prevented the lowering of any FY2008 FMAPs and increased the
FY2008 FMAP for one state (Texas). The methodology took advantage of a data timing issue that does not apply after FY2008. HHS
had initially expressed concern that some states could see lower FMAPs in later years as a result of the provision, but the final
methodology indicated that there is no reliable way to track the number and income of evacuees on an ongoing basis and therefore
no basis for adjusting FMAPs after FY2008. The provision also applied for purposes of computing the enhanced FMAP for CHIP.
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Exception Description
Citations
Adjustment for disaster
As of CY2011, a disaster-recovery FMAP adjustment is available for states in which (1) during one of the preceding seven years, the
P.L. 111-148, as amended by
recovery
President declared a major disaster under the Stafford Act and every county in the state warranted at least public assistance under
P.L. 111-152; SSA § 1905(aa)
that act and (2) the FMAP declines by a specified amount. To trigger the adjustment, a state’s regular FMAP must be at least three
percentage points less than last year’s regular FMAP plus (if applicable) any hold harmless increase under P.L. 111-5; the adjustment
is an FMAP increase equal to 50% of the difference between the two. To continue receiving the adjustment, the state’s regular
FMAP must be at least three percentage points less than last year’s adjusted FMAP; the adjustment is an FMAP increase equal to
25% of the difference between the two. It appears that Louisiana is the only state that will qualify in CY2011. It meets the Stafford
Act criteria and its regular FY2011 FMAP (63.61%) is at least three percentage points less than its regular FY2010 FMAP plus hold
harmless (72.47%); its adjustment will be 4.43 percentage points, for a total FMAP of 68.04%.
Adjustment for certain
As of FY2006, significantly disproportionate employer pension and insurance fund contributions will be excluded from the
P.L. 111-3 § 614; 75 Federal
employer contributions
calculation of Medicaid FMAPs. This will have the effect of reducing certain states’ per capita personal income relative to the
Register 32182 (June 7, 2010)
national average, which in turn could increase their Medicaid FMAPs. HHS recently proposed a methodology for making the
adjustments in a notice with comment period.
Certain Populations
Newly eligible individuals Historically, Medicaid eligibility has generally been limited to low-income individuals who fall into specified categories (typically
P.L. 111-148, as amended by
enrolled in new eligibility children, parents, pregnant women, disabled, and elderly). As of CY2014, states will be required to cover individuals under a new
P.L. 111-152; SSA § 1905(y)
group through 133% FPL
eligibility group for nonelderly, nonpregnant adults at or below 133% FPL. An increased FMAP will be provided for “newly eligible”
individuals in this group. The newly eligible are defined as those who would not have been eligible for Medicaid in the state as of
12/1/2009 or were eligible under a waiver but not enrolled because of limits or caps on waiver enrollment. Newly eligible FMAPs
will equal:
CY2014-CY2016 = 100%; CY2017 = 95%; CY2018 = 94%; CY2019 = 93%; CY2020+ = 90%.
Expansion state
Although Medicaid eligibility has generally been limited to certain categories of individuals, some states provide health coverage for
P.L. 111-148, as amended by
individuals enrolled in
all low-income individuals using Medicaid waivers and/or state-only funds. As a result, they have few or no individuals who will
P.L. 111-152; SSA § 1905(z)(2)
new eligibility group
qualify for the “newly eligible” FMAP beginning in CY2014. To address this issue, as of CY2014, an increased FMAP will be provided
through 133% FPL
for individuals in “expansion states” who are enrolled in the new eligibility group for nonelderly, nonpregnant adults at or below
133% FPL. Expansion states are defined as those that, as of 3/23/2010 (P.L. 111-148’s enactment date), offered health benefits
coverage meeting certain criteria statewide to parents and nonpregnant childless adults at least through 100% FPL. The formula
used to calculate expansion state FMAPs [regular FMAP + (newly eligible FMAP – regular FMAP) * transition percentage equal to
50% in CY2014, 60% in CY2015, 70% in CY2016, 80% in CY2017, 90% in CY2018, and 100% in CY2019+] will lead the expansion
state FMAPs to vary based on a state’s regular FMAP until CY2019, at which point they will equal newly eligible FMAPs:
CY2014 = at least 75%; CY2015 = at least 80%; CY2016 = at least 85%; CY2017 = at least 86%; CY2018 = at least 90%; CY2019 =
93%; CY2020+ = 90%.
Other expansion state
During CY2014 and CY2015, an FMAP increase of 2.2 percentage points is available for expansion states that (1) the Secretary of
P.L. 111-148, as amended by
individuals
HHS determines will not receive any FMAP increase for newly eligible individuals and (2) have not been approved to divert
P.L. 111-152; SSA § 1905(z)(1)
Medicaid disproportionate share hospital funds to pay for the cost of health coverage under a waiver in effect as of July 2009. The
FMAP increase applies to those who are not newly eligible individuals as described in relation to the new eligibility group for
nonelderly, nonpregnant adults at or below 133% FPL. It appears that Vermont meets the criteria for this increase.
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Exception Description
Citations
Certain women with
For states that opt to cover certain women with breast or cervical cancer who do not qualify for Medicaid under a mandatory
P.L. 106-354, as amended by
breast or cervical cancer
eligibility pathway and are otherwise uninsured, expenditures for these women are reimbursed using the enhanced FMAP that
P.L. 107-121; SSA § 1905(b)
applies to CHIP.
Qualifying Individuals
States are required to pay Medicare Part B premiums for Medicare beneficiaries with income between 120% and 135% FPL and
P.L. 105-33, most recently
program
limited assets (referred to as “qualifying individuals”), up to a specified dollar allotment. They receive 100% federal reimbursement
extended via P.L. 111-5; SSA §
for these costs, which are financed at the federal level by a transfer of funds from Medicare to Medicaid. This provision has been
1933(d)
extended numerous times and is currently funded through December 2010.
Certain Providers
Indian Health Service
States receive 100% federal reimbursement for services provided through an Indian Health Service facility.
P.L. 94-437; SSA § 1905(b)
facility
Primary care payment
During CY2013 and CY2014, states are required to provide Medicaid payments that are at or above Medicare rates for primary
P.L. 111-148, as amended by
rates
care services (defined as evaluation and management and certain administration of immunizations) furnished by a physician with a
P.L. 111-152; SSA §
primary specialty designation of family, general internal, or pediatric medicine. States will receive 100% federal reimbursement for
1902(a)(13)(C)
expenditures attributable to the amount by which Medicare exceeds their Medicaid payment rates in effect on 7/1/2009.
Certain Services
Family planning
States receive 90% federal reimbursement for family planning services and supplies.
P.L. 92-603; SSA § 1903(a)(5)
Certain preventive
As of CY2013, states that opt to cover—with no cost sharing—clinical preventive services recommended with a grade of A or B by P.L. 111-148, as amended by
services and
the United States Preventive Services Task Force (USPSTF) and adult immunizations recommended by the Advisory Committee on
P.L. 111-152; SSA § 1905(b)
immunizations
Immunization Practices (ACIP) will receive a one percentage point increase in their FMAP for those services. It is unclear whether
the increase will apply to preventive services that may already be coverable under the mandatory Early and Periodic Screening,
Diagnosis, and Treatment (EPSDT) benefit for individuals under age 21.
Smoking cessation for
As of CY2013, states that opt to cover USPSTF preventive services and ACIP adult immunizations as noted above will also receive
P.L. 111-148, as amended by
pregnant women
a one percentage point increase in their FMAP for smoking cessation services that are mandatory for pregnant women.
P.L. 111-152; SSA § 1905(b)
Health homes
As of CY2011, states have a new option for providing a “health home” and associated services to certain individuals with chronic
P.L. 111-148, as amended by
conditions. They will receive 90% federal reimbursement for these services for the first eight quarters that the health home option
P.L. 111-152; SSA § 1945(c)(1)
is in effect in the state.
Home and community-
As of FY2011, states have a new option for providing home and community-based attendant services and supports for certain
P.L. 111-148, as amended by
based attendant services
individuals at or below 150% FPL, or a higher income level applicable to those who require an institutional level of care. They will
P.L. 111-152; SSA § 1915(k)(2)
and supports
receive a six percentage point increase in their FMAP for these services.
State balancing incentive
During FY2011-FY2015, state balancing incentive payments are available under certain conditions for states in which less than 50%
P.L. 111-148, as amended by
payments
of Medicaid expenditures for long-term services and supports (LTSS) are non-institutional. Qualifying states with less than 25% non-
P.L. 111-152, § 10202
institutional LTSS must plan to achieve a 25% target and can receive a five percentage point increase in their FMAP for non-
institutional LTSS; those with less than 50% must plan to achieve a 50% target and can receive a two percentage point increase.
Federal spending on these increased FMAPs is limited to $3 billion during the period.
Source: Congressional Research Service, based on sources noted in the table.
Notes: Unless noted, exceptions do not apply for purposes of computing the enhanced FMAP for CHIP. SSA = Social Security Act; FPL = federal poverty line.
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

Recent Issues and Legislation
Temporary FMAP Increase in ARRA and Six-Month Extension
In the 111th Congress, a temporary FMAP increase was included in the American Recovery and
Reinvestment Act of 2009 (ARRA, P.L. 111-5) and later extended by H.R. 1586 (which was
signed into law as P.L. 111-226).9 It runs for 11 quarters, from the first quarter of FY2009 through
the third quarter of FY2011 (i.e., October 2008 through June 2011), subject to certain
requirements.
States were originally slated to receive the ARRA increase for nine quarters. Although House-
passed and Senate-passed versions were broadly similar, one difference was the degree to which
funds would be targeted at states experiencing unemployment rate increases. The enacted version
reflected a middle ground on this issue.10 The Administration has estimated that the original
ARRA provision will increase federal payments to states by about $91 billion; CBO’s most recent
estimate is $89 billion.11
ARRA FMAPs were originally set to end December 31, 2010, but about 30 states assumed that a
six-month extension would be provided when they planned their SFY2011 budgets (most of
which began on July 1).12 After a number of legislative attempts,13 the House and Senate

9 In the 110th Congress, a temporary FMAP increase was debated but not adopted at the end of 2008.
10 According to statements made during a Senate Finance Committee markup on January 27, 2009, it was estimated that
the House-passed version would provide about half of its spending via hold harmless and across-the-board increases,
and about half via an unemployment-related increase. In contrast, the Senate-passed version was estimated to provide
an 80%/20% split. The enacted version reflects a 65%/35% split.
11 Guidance from the Centers for Medicare and Medicaid Services (CMS) indicated that federal payments would
increase by $87 billion, as did initial cost estimates from the Congressional Budget Office; see Department of Health
and Human Services, Centers for Medicare and Medicaid Services, State Medicaid Director letter #09-005 (ARRA #5),
August 19, 2009, http://www.cms.hhs.gov/SMDL/downloads/SMD081909.pdf. Since then, CMS has altered its
interpretation of certain ARRA FMAP provisions so that states will receive an additional $4.3 billion; see “Obama
Administration Grants Relief to States on Payments to Medicare for Part D Costs,” HHS News Release, February 18,
2010, http://www.hhs.gov/news/press/2010pres/02/20100218c.html. In particular, the amount of “clawback” money
states are required to pay the federal government for expenditures in Part D (the Medicare prescription drug program)
by individuals enrolled in both Medicare and Medicaid (“dual eligibles”) is now reduced based on the increased ARRA
FMAPs, in spite of prior guidance to the contrary; see Question 10 of “Frequently Asked Questions American
Recovery & Reinvestment Tax Act of 2009 (ARRA),” CMS, http://www.cms.hhs.gov/recovery/downloads/
arrafmapfactsheet.pdf. The February 18, 2009, news release explained, “States make clawback payments monthly and
CMS is currently reprogramming its billing system to calculate the new, reduced payments owed by states. The
savings, which are retroactive to October 2008, will be deducted from what they otherwise would have owed going
forward.” For CBO’s most recent estimate of $89 billion, see Congressional Budget Office, The Budget and Economic
Outlook: An Update, August 2010, p. 13, http://www.cbo.gov/ftpdocs/117xx/doc11705/08-18-Update.pdf.
12 See information available at National Conference of State Legislatures, Legislative Update: Extention of ARRA
Enhanced Medicaid Match , http://www.ncsl.org/?tabid=19710.
13 Three bills (H.R. 4213, H.R. 3962, and H.R. 2847) had previously contained six-month extension provisions at some
point. On March 10, 2010, the Senate passed a version of H.R. 4213 that included a straight six-month extension of the
existing ARRA provision; on May 28, the House voted to exclude the extension. In June, two cloture motions that
would have cleared the way for another Senate floor vote on a straight extension (S.Amdt. 4369 to H.R. 4213) and a
scaled-back extension (S.Amdt. 4386 to H.R. 4213) failed. Prior to the action on H.R. 4213, there were two House
floor votes to pass a six-month extension (H.R. 3962 on November 7, 2009, and H.R. 2847 on December 16, 2009) and
no Senate floor votes to do so.
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

ultimately agreed to a scaled-back six-month extension as part of P.L. 111-226. The
Congressional Budget Office (CBO) estimates that the extension will provide an additional $16
billion.14 Depending on the data and methods used, state-by-state estimates will vary.15
Details of the ARRA provision, as amended by P.L. 111-226, are as follows:
• For a “recession adjustment period” that begins with the first quarter of FY2009
and runs through the third quarter of FY2011 (i.e., October 2008 through June
2011), the provision holds all states harmless from any decline in their regular
FMAPs; provides all states with an across-the-board increase of 6.2 percentage
points until the last two quarters of the period, at which point the across-the-
board increase phases down to 3.2 and then 1.2; and provides qualifying states
with an unemployment-related increase.16 It allowed each territory to make a
one-time choice between an FMAP increase of 6.2 percentage points along with a
15% increase in its spending cap, or its regular FMAP along with a 30% increase
in its cap; all chose the latter.
• The full amount of the temporary ARRA FMAP increase applies only to
Medicaid, excluding disproportionate share hospital payments and most
expenditures for individuals who are eligible for Medicaid because of an increase
in a state’s income eligibility standards above what was in effect on July 1, 2008.
There is an exception to the July 1, 2008, rule for certain childless adults.17 A
portion of the temporary FMAP increase (hold harmless plus across-the-board)
applies to Title IV-E foster care and adoption assistance.

14 Congressional Budget Office, Budgetary Effects of Senate Amendment 4575, August 4, 2010, http://www.cbo.gov/
ftpdocs/117xx/doc11756/sa4575.pdf. In addition to the FMAP extension, P.L. 111-26 provided states with $10 billion
in education funding (see CRS Report R41353, Education Jobs Fund Proposals in the 111th Congress). These costs
were offset by a change in the calculation of prices that determine Medicaid drug rebates, reductions in Supplemental
Nutrition Assistance Program spending (see CRS Report R41374, Reducing SNAP (Food Stamp) Benefits Provided by
the ARRA: P.L. 111-226 & S. 3307), and various rescissions and tax changes.
15 For example, see Federal Funds Information for States, Estimates of Latest ARRA FMAP Extension, June 24, 2010,
http://www.ffis.org/node/2106, and Center on Budget and Policy Priorities, State-by-State Numbers: Critical Fiscal
Relief at Stake in Tuesday’s House Vote, August 6, 2010, http://www.cbpp.org/files/8-6-10sfp.pdf.
16 States are evaluated on a quarterly basis for the unemployment-related FMAP increase, which equals a percentage
reduction in the state share. A state is evaluated based on its unemployment rate in the most recent three-month period
for which data are available (except for the first two and last two quarters of the temporary FMAP increase, for which
the three-month period differs) compared to its lowest unemployment rate in any three-month period beginning on or
after January 1, 2006. The criteria are as follows: unemployment rate increase of at least 1.5 but less than 2.5
percentage points = 5.5% reduction in state share; increase of at least 2.5 but less than 3.5 percentage points = 8.5%
reduction; increase of at least 3.5 percentage points = 11.5% reduction. A state’s percentage reduction can increase over
time as its unemployment rate increases, but is not allowed to decrease until the second quarter of FY2011. The
percentage reduction is applied to the state share after the hold harmless increase and after one-half of the across-the-
board increase. For example, after applying the across-the-board increase of 6.2 percentage points that applies for most
of the recession adjustment period, a state with a regular FMAP of 50% would have an FMAP of 56.20%. If the state
share (after the hold harmless and one-half of the across-the-board increase) were further reduced by 5.5%, the state
would receive an additional FMAP increase of 2.58 percentage points (46.9 state share * 0.055 reduction in state share
= 2.58). The state’s total FMAP increase would be 8.78 points (6.2 + 2.58 = 8.78), providing an FMAP of 58.78%.
17 Under the Children’s Health Insurance Program Reauthorization Act of 2009, a number of states were required to
move their childless adult populations out of CHIP by December 31, 2009, and could apply to have them enrolled
under a Medicaid waiver. However, ARRA FMAPs were not originally available for these childless adults because they
had not been eligible for Medicaid on July 1, 2008. Under P.L. 111-226, states can now receive ARRA FMAPs for
nonpregnant childless adults in Medicaid who would have been eligible for CHIP based on standards in effect on
December 31, 2009. It appears that Idaho, Michigan, and New Mexico are affected by this provision.
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

• To receive ARRA FMAPs, states are required to do the following: certify that
they will request and use the funds;18 maintain their Medicaid “eligibility
standards, methodologies, and procedures” as in effect on July 1, 2008;19, 20
comply with requirements for prompt payment of health care providers under
Medicaid (and report to the HHS Secretary on their compliance);21 not deposit or
credit the additional federal funds paid as a result of the increase to any reserve
or rainy day fund; ensure that local governments do not pay a larger percentage
of the state’s nonfederal Medicaid expenditures than otherwise would have been
required on September 30, 2008;22 and submit a report to the Secretary regarding
how the additional federal funds paid as a result of the temporary FMAP increase
were expended.23

18 Section 1607 of ARRA required a state governor or legislature to certify that the state would request and use funds
provided by the act. However, the state legislature option appears to have gone unused; for ARRA letters from each
governor, see the “Certification” link on each state’s page at http://www.recovery.gov/Transparency/
RecipientReportedData/Pages/Landing.aspx. The six-month extension in P.L. 111-226 requires certification from a
state’s chief executive officer and does not include the state legislature option; see Centers for Medicare & Medicaid
Services, FMAP Extension Guidance, August 18, 2010, http://www.cms.gov/apps/docs/08-18-10-cmcs-informational-
bulletin-FMAP-Extension-Guidance.pdf.
19 States that have restricted their “eligibility standards, procedures, or methodologies” can reinstate them in any quarter
to begin receiving the temporary FMAP increase. In addition, those that reinstate them prior to July 1, 2009, can
receive the increase for the first three quarters of FY2009. States were required by HHS to attest that they meet the
eligibility requirements; see http://www.hhs.gov/recovery/fmapprocess.html. HHS indicated that four states
(Mississippi, North Carolina, South Carolina, and Virginia) were ineligible when funding estimates were first released
on February 23, 2009, but those states have since been cleared to receive the increase. A more recent study found that
the ARRA requirements resulted in 14 states reversing and 5 states abandoning planned restrictions to eligibility; see
Kaiser Commission on Medicaid and the Uninsured, State Fiscal Conditions and Medicaid, September 2009, at
http://www.kff.org/medicaid/upload/7580-05.pdf. For guidance on the maintenance of effort requirements, see
Department of Health and Human Services, Centers for Medicare and Medicaid Services, State Medicaid Director
letter #09-005 (ARRA #5), August 19, 2009, http://www.cms.hhs.gov/SMDL/downloads/SMD081909.pdf. For the
temporary FMAP increase enacted in 2003, the law referred only to “eligibility” and the HHS interpretation did not
include procedural changes (e.g., increasing the frequency of eligibility redeterminations was not considered an
eligibility restriction); see http://www.cms.hhs.gov/smdl/downloads/smd061303.pdf. The ARRA language is more
stringent.
20 Prior to the Patient Protection and Affordable Care Act (PPACA) , Arizona was slated to “eliminate the KidsCare
[CHIP] program effective June 15, 2010”; Letter from Arizona Health Care Cost Containment System (AHCCCS)
Assistant Director Monica Coury to Moe Gagnon, CMS, March 18, 2010, http://www.azahcccs.gov/shared/Downloads/
News/Cover_Letter_KC_Elim.pdf. Because Arizona’s CHIP program is entirely separate from Medicaid, this action
would not have been relevant to the ARRA maintenance of effort (MOE). Arizona had also planned to “scale back
eligibility” for parents and childless adults in Medicaid; Letter from Maria Coury to Steven Rubio, CMS, March 18,
http://www.azahcccs.gov/shared/Downloads/News/WaiverNotice_Final.pdf. However, as discussed later in this report,
the state may not be taking these actions because of MOE provisions in PPACA.
21 More specifically, the temporary FMAP increase is not be available for any claim received by the state from a health
care practitioner subject to prompt pay requirements for such days during any period in which the state has failed to pay
claims in accordance with those requirements.
22 Some states require local governments to finance part of the nonfederal (i.e., state) share of Medicaid costs. Since a
temporary FMAP increase would reduce a state’s nonfederal share, a local government whose required contribution is a
specified dollar amount (or some other amount that is not a fixed percentage of the nonfederal share) could pay a larger
percentage of the nonfederal share than it otherwise would have without the FMAP increase. The Patient Protection and
Affordable Care Act clarified that voluntary local contributions would not lead a state to run afoul of this requirement.
See Department of Health and Human Services, Centers for Medicare & Medicaid Services, State Medicaid Director
letter #10-010 (ARRA #7), June 21, 2010, https://www.cms.gov/smdl/downloads/SMD10010.pdf.
23 For the requirements related to rainy day funds and local governments’ share of nonfederal expenditures, the law was
written such that states would be denied the across-the-board and unemployment-related FMAP increases (and
territories would be denied cap increases) if they are out of compliance; however, they would not be denied the hold
(continued...)
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

At the end of this report, Table A-2 and Table A-3 show the increased FMAPs for FY2009 and
the first two quarters of FY2010 provided under ARRA. Table A-2 also shows the additional
federal Medicaid funding provided to states as a result of their increased FY2009 FMAPs. For the
second quarter of FY2010, 41 states and the District of Columbia are in the highest tier for the
unemployment adjustment. Two additional states had previously been in the highest tier and are
benefiting from a hold harmless provision that prevents their unemployment adjustment from
declining through the first quarter of FY2011.
FMAP increases reduce the amount of state funding that is required to maintain a given level of
Medicaid services. For states that are contemplating cuts in order to slow the growth of or reduce
Medicaid spending (e.g., by eliminating coverage of certain benefits, freezing or reducing
provider reimbursement rates, increasing cost-sharing or premiums for beneficiaries), increased
federal funding could enable them to avoid those cuts. For others, the state savings that result
from an FMAP increase could be used for a variety of purposes that are not limited to Medicaid.24
In addition to avoiding cuts to Medicaid, CBO has indicated that providing additional federal aid
to states that are facing fiscal pressures will probably stimulate the economy. However, the
estimated effects vary.25 Federal aid to states whose budgets are relatively healthy might provide
little stimulus if it is used to build up rainy day funds (a prohibited use of the ARRA FMAP
increase), rather than increase spending or reduce taxes.26
FMAP Changes in the New Health Reform Law
The recently enacted Patient Protection and Affordable Care Act (PPACA, P.L. 111-148, as
amended by P.L. 111-152) contains a number of provisions that affect FMAPs, some of which are
discussed below. For more information, see Table 1.
As a condition of receiving any Medicaid funds, PPACA requires states to comply with
maintenance of effort (MOE) provisions that prevent them from restricting eligibility. Prior to
CY2014, states cannot make their Medicaid or child CHIP eligibility standards, methodologies, or
procedures more restrictive than they were as of March 23, 2010 (PPACA’s enactment date).27

(...continued)
harmless FMAP increase. In contrast, for the requirements related to maintenance of eligibility and prompt payment,
states would be denied all of the temporary FMAP increases (including hold harmless) if they are out of compliance.
24 For example, 36 states reported that they used funds from the ARRA FMAP increase to close or reduce their
Medicaid budget shortfall; however, 44 states used the funds to close or reduce state general fund shortfalls. See Kaiser
Commission on Medicaid and the Uninsured, State Fiscal Conditions and Medicaid, September 2009, at
http://www.kff.org/medicaid/upload/7580-05.pdf. Additional information on state fiscal conditions is available from a
number of sources, including the Center on Budget and Policy Priorities (for example, see An Update on State Budget
Cuts, August 4, 2010, http://www.cbpp.org/files/3-13-08sfp.pdf); the National Association of State Budget Officers and
the National Governors Association, which jointly publish a variety of publications (http://www.nasbo.org/); and the
National Conference of State Legislatures (http://www.ncsl.org/Default.aspx?TabID=756&tabs=951,61,161#951).
25 Congressional Budget Office, letter to the Honorable Charles E. Grassley, March 2, 2009, http://www.cbo.gov/
ftpdocs/100xx/doc10008/03-02-Macro_Effects_of_ARRA.pdf.
26 Statement of Peter R. Orszag, Director, Congressional Budget Office, before the Committee on Finance, U.S. Senate,
Options for Responding to Short-Term Economic Weakness, January 22, 2008, at http://cbo.gov/ftpdocs/89xx/doc8932/
01-22-TestimonyEconStimulus.pdf.
27 In CY2011-CY2013, there is an exception to the MOE for nonpregnant, nondisabled adults above 133% FPL if the
state has a deficit. As discussed in an earlier footnote, Arizona had planned to restrict Medicaid and CHIP eligibility.
However, it concluded that the changes would violate the MOE requirements in PPACA. See letter from Arizona
(continued...)
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

After that date, states can scale back on eligibility for adults but must continue the MOE for
children under age 19 through FY2019.
Newly Eligible FMAPs. Historically, Medicaid eligibility has generally been limited to low-
income individuals who fall into specified categories (typically children, parents, pregnant
women, disabled, and elderly). As of CY2014, states will be required to cover individuals under a
new eligibility group for nonelderly, nonpregnant adults at or below 133% of the federal poverty
line (FPL).28 An increased FMAP will be provided for “newly eligible” individuals in this group.
The newly eligible are defined as those who would not have been eligible for Medicaid in the
state as of December 1, 2009, or were eligible under a waiver but not enrolled because of limits or
caps on waiver enrollment. Newly eligible FMAPs will equal:
• CY2014-CY2016 = 100%;
• CY2017 = 95%;
• CY2018 = 94%;
• CY2019 = 93%;
• CY2020+ = 90%.
Expansion State FMAPs. Although Medicaid eligibility has generally been limited to certain
categories of individuals, some states provide health coverage for all low-income individuals
using Medicaid waivers and/or state-only funds. As a result, they have few or no individuals who
will qualify for the “newly eligible” FMAP. As of CY2014, an increased FMAP will be provided
for individuals in “expansion states” who are enrolled in the new eligibility group for nonelderly,
nonpregnant adults at or below 133% FPL. Expansion states are defined as those that, as of
March 23, 2010 (PPACA’s enactment date), offered health benefits coverage meeting certain
criteria29 statewide to parents and nonpregnant childless adults at least through 100% FPL. The
formula used to calculate expansion state FMAPs will lead them to vary based on a state’s regular
FMAP until CY2019, at which point they will equal newly eligible FMAPs:30
• CY2014 = at least 75%;
• CY2015 = at least 80%;
• CY2016 = at least 85%;
• CY2017 = at least 86%;
• CY2018 = at least 90%;

(...continued)
Health Care Cost Containment System (AHCCCS) Director Thomas J. Betlach to Governor Janice K. Brewer, March
25, 2010, http://www.azahcccs.gov/reporting/Downloads/HealthCareReform/GovernorBrewerLetter_03-25-10.pdf.
28 When determining Medicaid eligibility for this group (and others) beginning in CY2014, states will be required to
disregard a dollar amount of income equal to 5% FPL. The disregard will allow individuals at or below 138% FPL to
enroll in the new eligibility group by reducing their countable income to 133% FPL or less.
29 The coverage must include inpatient hospital services and cannot consist only of the following: premium assistance
(or Medicaid coverage otherwise dependent on employer coverage or contribution), hospital-only plans, high-
deductible health plans, or Health Opportunity Accounts under Section 1938 of the Social Security Act.
30 Expansion FMAP formula = [regular FMAP + (newly eligible FMAP – regular FMAP) * transition percentage equal
to 50% in CY2014, 60% in CY2015, 70% in CY2016, 80% in CY2017, 90% in CY2018, and 100% in CY2019+].
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

• CY2019 = 93%;
• CY2020+ = 90%.
Although HHS will make the official determination, one source suggests that 11 states (Arizona,
Delaware, Hawaii, Maine, Massachusetts, Minnesota, New York, Pennsylvania, Vermont,
Washington, Wisconsin) and the District of Columbia might meet the definition of an expansion
state.31
During CY2014 and CY2015, an FMAP increase of 2.2 percentage points is available for
expansion states that (1) the Secretary of HHS determines will not receive any FMAP increase for
newly eligible individuals and (2) have not been approved to divert Medicaid disproportionate
share hospital funds to pay for the cost of health coverage under a waiver in effect as of July
2009. The FMAP increase applies to those who are not newly eligible individuals as described in
relation to the new eligibility group for nonelderly, nonpregnant adults at or below 133% FPL. It
appears that Vermont meets the criteria for this increase.
Additional Medicaid Changes. As noted in Table 1, PPACA also provides—subject to various
requirements—an increased FMAP for certain disaster-affected states, primary care payment rate
increases, specified preventive services and immunizations, smoking cessation services for
pregnant women, specified home and community-based services, and health home services for
certain people with chronic conditions.
CHIP. Prior to PPACA, federal CHIP allotments were provided through FY2013 and states
received reimbursement for CHIP expenditures based on the E-FMAP described at the beginning
of this report. Under PPACA, the E-FMAP for CHIP expenditures in FY2016-FY2019 will be
increased by 23 percentage points, up to 100%.32 PPACA also provides new federal CHIP
allotments for FY2014 and FY2015. However, no federal CHIP allotments are provided during
the period in which the 23-point increase in the E-FMAP is slated to be in effect.
Exclusion of Certain Employer Contributions from FMAP
Calculations
The Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA, P.L. 111-3)
requires that significantly disproportionate employer pension and insurance fund contributions be
excluded from the calculation of Medicaid FMAPs beginning with FY2006. This will have the
effect of reducing certain states’ per capita personal income relative to the national average,
which in turn could increase their Medicaid FMAPs. HHS recently proposed a methodology for
making the adjustments in a notice with comment period.33

31 However, by December 2009, the source notes that some (e.g., Maine, Pennsylvania, Washington) had closed
enrollment in these programs. See Table 2 in Kaiser Commission on Medicaid and the Uninsured, Where are States
Today?, December 2009, http://www.kff.org/medicaid/upload/7993.pdf.
32 Currently, E-FMAPs can range from 65% to a maximum of 85%. If the PPACA increase applied in FY2011, nine
states (Alabama, Arkansas, Idaho, Kentucky, Mississippi, New Mexico, South Carolina, Utah, West Virginia) and the
District of Columbia would have a CHIP matching rate of 100%.
33 75 Federal Register 32182, June 7, 2010.
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

Appendix. Regular and ARRA FMAPs for Medicaid
Table A-1. Regular FMAPs, FY2003-FY2011
FY03
FY03
FY04
FY04
State
first 2
last 2
first 3
last
FY05 FY06b FY07b FY08b FY09b FY10b FY11b
quarters quartersa quartersa quarter
Alabama
70.60
73.55
73.70 70.75 70.83 69.51 68.85 67.62 67.98 68.01 68.54

Alaskac
58.27
61.22
61.34 58.39 57.58 57.58 57.58 52.48 50.53 51.43 50.00
Arizona
67.25
70.20
70.21 67.26 67.45 66.98 66.47 66.20 65.77 65.75 65.85
Arkansas
74.28
77.23
77.62 74.67 74.75 73.77 73.37 72.94 72.81 72.78 71.37
California
50.00
54.35
52.95 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00
Colorado
50.00
52.95
52.95 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00
Connecticut
50.00
52.95
52.95 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00
Delaware
50.00
52.95
52.95 50.00 50.38 50.09 50.00 50.00 50.00 50.21 53.15
District
of
Columbia 70.00
72.95
72.95 70.00 70.00 70.00 70.00 70.00 70.00 70.00 70.00
Florida
58.83
61.78
61.88 58.93 58.90 58.89 58.76 56.83 55.40 54.98 55.45
Georgia
59.60
62.55
62.55 59.58 60.44 60.60 61.97 63.10 64.49 65.10 65.33
Hawai
58.77
61.72
61.85 58.90 58.47 58.81 57.55 56.50 55.11 54.24 51.79
Idaho
70.96
73.97
73.91 70.46 70.62 69.91 70.36 69.87 69.77 69.40 68.85
Illinois
50.00
52.95
52.95 50.00 50.00 50.00 50.00 50.00 50.32 50.17 50.20
Indiana
61.97
64.99
65.27 62.32 62.78 62.98 62.61 62.69 64.26 65.93 66.52
Iowa
63.50
66.45
66.88 63.93 63.55 63.61 61.98 61.73 62.62 63.51 62.63
Kansas
60.15
63.15
63.77 60.82 61.01 60.41 60.25 59.43 60.08 60.38 59.05
Kentucky
69.89
72.89
73.04 70.09 69.60 69.26 69.58 69.78 70.13 70.96 71.49
Louisiana
71.28
74.23
74.58 71.63 71.04 69.79 69.69 72.47 71.31 67.61 63.61
Maine
66.22
69.53
69.17 66.01 64.89 62.90 63.27 63.31 64.41 64.99 63.80
Maryland
50.00
52.95
52.95 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00
Massachusetts
50.00
52.95
52.95 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00
Michigan
55.42
59.31
58.84 55.89 56.71 56.59 56.38 58.10 60.27 63.19 65.79
Minnesota
50.00
52.95
52.95 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00
Mississippi
76.62
79.57
80.03 77.08 77.08 76.00 75.89 76.29 75.84 75.67 74.73
Missouri
61.23
64.18
64.42 61.47 61.15 61.93 61.60 62.42 63.19 64.51 63.29
Montana
72.96
75.91
75.91 72.85 71.90 70.54 69.11 68.53 68.04 67.42 66.81
Nebraska
59.52
62.50
62.84 59.89 59.64 59.68 57.93 58.02 59.54 60.56 58.44
Nevada
52.39
55.34
57.88 54.93 55.90 54.76 53.93 52.64 50.00 50.16 51.61
New
Hampshire
50.00
52.95
52.95 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00
New
Jersey
50.00
52.95
52.95 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00
New
Mexico
74.56
77.51
77.80 74.85 74.30 71.15 71.93 71.04 70.88 71.35 69.78
New
York
50.00
52.95
52.95 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00
North
Carolina
62.56
65.51
65.80 62.85 63.63 63.49 64.52 64.05 64.60 65.13 64.71
North
Dakota
68.36
72.82
71.31 68.31 67.49 65.85 64.72 63.75 63.15 63.01 60.35
Ohio
58.83
61.78
62.18 59.23 59.68 59.88 59.66 60.79 62.14 63.42 63.69
Oklahoma
70.56
73.51
73.51 70.24 70.18 67.91 68.14 67.10 65.90 64.43 64.94
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

FY03
FY03
FY04
FY04
State
first 2
last 2
first 3
last
FY05 FY06b FY07b FY08b FY09b FY10b FY11b
quarters quartersa quartersa quarter
Oregon
60.16
63.11
63.76 60.81 61.12 61.57 61.07 60.86 62.45 62.74 62.85
Pennsylvania
54.69
57.64
57.71 54.76 53.84 55.05 54.39 54.08 54.52 54.81 55.64
Rhode
Island
55.40
58.35
58.98 56.03 55.38 54.45 52.35 52.51 52.59 52.63 52.97
South
Carolina
69.81
72.76
72.81 69.86 69.89 69.32 69.54 69.79 70.07 70.32 70.04
South
Dakota
65.29
68.88
68.62 65.67 66.03 65.07 62.92 60.03 62.55 62.72 61.25
Tennessee
64.59
67.54
67.54 64.40 64.81 63.99 63.65 63.71 64.28 65.57 65.85
Texas
59.99
63.12
63.17 60.22 60.87 60.66 60.78 60.56d 59.44 58.73 60.56
Utah
71.24
74.19
74.67 71.72 72.14 70.76 70.14 71.63 70.71 71.68 71.13
Vermont
62.41
66.01
65.36 61.34 60.11 58.49 58.93 59.03 59.45 58.73 58.71
Virginia
50.53
54.40
53.48 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00
Washington
50.00
53.32
52.95 50.00 50.00 50.00 50.12 51.52 50.94 50.12 50.00
West
Virginia
75.04
78.22
78.14 75.19 74.65 72.99 72.82 74.25 73.73 74.04 73.24
Wisconsin
58.43
61.52
61.38 58.41 58.32 57.65 57.47 57.62 59.38 60.21 60.16
Wyoming
61.32
64.92
64.27 59.77 57.90 54.23 52.91 50.00 50.00 50.00 50.00
Number with
decrease from
previous year
17
—
—
11e 19f 28 27 20 17 14 22
Source: Department of Health and Human Services (HHS).
Notes: Reflects FMAPs calculated using the regular FMAP formula, with exceptions noted below.
a. The Jobs and Growth Tax Relief Reconciliation Act of 2003 (P.L. 108-27) temporarily increased Medicaid
FMAPs to provide states with approximately $10 billion in additional funds (they also received $10 billion in
direct grants).
b. FY2006 and later years do not reflect increases that may result from excluding certain employer
contributions from the calculation of Medicaid FMAPs, as required by the Children’s Health Insurance
Program Reauthorization Act of 2009 (P.L. 111-3). FY2009-FY2011 FMAPs do not reflect temporary
increases provided under the American Recovery and Reinvestment Act of 2009 (P.L. 111-5). FY2011 does
not reflect increases (e.g., for disaster recovery) that may be available as a result of the Patient Protection
and Affordable Care Act (P.L. 111-148, as amended by P.L. 111-152). See text for details.
c. Alaska’s Medicaid FMAP used an alternative formula for FY2001-FY2005 (P.L. 106-554) and did not decrease
in FY2006-FY2007 because of a provision in the Deficit Reduction Act of 2005 (DRA, P.L. 109-171). Prior
to DRA, Alaska had reverted to using the same FMAP calculation as other states, providing an FY2006
FMAP of 50.16% and FY2007 FMAP of 51.07%.
d. This FY2008 value of 60.56% was provided by HHS implementation of a DRA provision related to
Hurricane Katrina. Using the regular FMAP formula, the state’s FY2008 value would have been 60.53%.
e. Compared to regular FMAPs that applied in the first two quarters of FY2003.
f.
Compared to regular FMAPs that applied in the last quarter of FY2004.
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

Table A-2. Increased FMAPs Under ARRA, FY2009
Additional
federal
Regular
ARRA
ARRA
ARRA
ARRA
Medicaid
FMAP FY09
FMAP 1st
FMAP 2nd FMAP 3rd
FMAP 4th
funding to
(excluding
quarter
quarter
quarter
quarter
states, FY09
State
ARRA)
FY09
FY09
FY09
FY09
(millions)
Alabama 67.98
76.64
76.64
77.51
77.51
$354

Alaska 50.53
58.68
58.68
61.12
61.12
$63

Arizona 65.77
75.01
75.01
75.93
75.93
$763

Arkansas 72.81
79.14
79.14
80.46
80.46
$232

California 50.00
61.59
61.59
61.59
61.59
$4,099

Colorado 50.00
58.78
58.78
61.59
61.59
$340

Connecticut 50.00
60.19
60.19
60.19
61.59
$503

Delaware 50.00
60.19
60.19
61.59
61.59
$129

District of Columbia
70.00
77.68
77.68
79.29
79.29
$132
Florida 55.40
67.64
67.64
67.64
67.64
$1,723

Georgia 64.49
73.44
73.44
74.42
74.42
$668

Hawai 55.11
66.13
66.13
67.35
67.35
$145

Idaho 69.77
78.37
78.37
79.18
79.18
$114

Illinois 50.32
60.48
60.48
61.88
61.88
$1,206

Indiana 64.26
73.23
73.23
74.21
74.21
$572

Iowa 62.62
68.82
68.82
68.82
70.71
$193

Kansas 60.08
66.28
66.28
68.31
69.41
$174

Kentucky 70.13
77.80
77.80
79.41
79.41
$419

Louisiana 71.31
80.01
80.01
80.01
80.75
$467

Maine 64.41
72.40
72.40
74.35
74.35
$206

Maryland 50.00
58.78
58.78
60.19
61.59
$637

Massachusetts 50.00
58.78
58.78
60.19
61.59
$1,201

Michigan 60.27
69.58
69.58
70.68
70.68
$990

Minnesota 50.00
60.19
60.19
61.59
61.59
$778

Mississippi 75.84
83.62
83.62
84.24
84.24
$288

Missouri 63.19
71.24
71.24
73.27
73.27
$620

Montana 68.04
76.29
76.29
77.14
77.14
$68

Nebraska 59.54
65.74
65.74
67.79
67.79
$109

Nevada 50.00
63.93
63.93
63.93
63.93
$177

New Hampshire
50.00
56.20
56.20
58.78
60.19
$85
New Jersey
50.00
58.78
58.78
61.59
61.59
$853
New Mexico
70.88
77.24
77.24
78.66
79.44
$227
New York
50.00
58.78
58.78
60.19
61.59
$4,327
North Carolina
64.60
73.55
73.55
74.51
74.51
$815
North Dakota
63.15
69.95
69.95
69.95
69.95
$38
Ohio 62.14
70.25
70.25
72.34
72.34
$1,188

Oklahoma 65.90
74.94
74.94
74.94
75.83
$340

Congressional Research Service
15

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Medicaid: The Federal Medical Assistance Percentage (FMAP)

Additional
federal
Regular
ARRA
ARRA
ARRA
ARRA
Medicaid
FMAP FY09
FMAP 1st
FMAP 2nd FMAP 3rd
FMAP 4th
funding to
(excluding
quarter
quarter
quarter
quarter
states, FY09
State
ARRA)
FY09
FY09
FY09
FY09
(millions)
Oregon 62.45
71.58
71.58
72.61
72.61
$342

Pennsylvania 54.52
63.05
63.05
64.32
65.59
$1,530

Rhode Island
52.59
63.89
63.89
63.89
63.89
$193
South Carolina
70.07
78.55
78.55
79.36
79.36
$366
South Dakota
62.55
68.75
68.75
70.64
70.64
$48
Tennessee 64.28
73.25
73.25
74.23
74.23
$631

Texas 59.44
68.76
68.76
68.76
69.85
$1,988

Utah 70.71
77.83
77.83
79.98
79.98
$126

Vermont 59.45
67.71
67.71
69.96
69.96
$102

Virginia 50.00
58.78
58.78
61.59
61.59
$573

Washington 50.94
60.22
60.22
62.94
62.94
$763

West Virginia
73.73
80.45
80.45
81.70
83.05
$176
Wisconsin 59.38
65.58
65.58
68.77
69.89
$555

Wyoming 50.00
56.20
56.20
56.20
58.78
$34

Total




$32,667

Source: Department of Health and Human Services (HHS), State and Territories Medicaid Program Awards,
http://transparency.cit.nih.gov/RecoveryGrants/grant.cfm?grant=Reinvestment.
Notes: The funding numbers above do not reflect the impact of the Administration’s altered interpretation of an
ARRA FMAP provision yielding $4.3 billion more for states over the entire recession adjustment period
(“Obama Administration Grants Relief to States on Payments to Medicare for Part D Costs,” HHS News
Release, February 18, 2010, http://www.hhs.gov/news/press/2010pres/02/20100218c.html). The news release
explained, “The savings, which are retroactive to October 2008, wil be deducted from what [states] otherwise
would have owed going forward [for clawback payments].”
The territories are not shown. Each territory could chose between an FMAP increase of 6.2 percentage points
along with a 15% increase in its spending cap, or its regular FMAP along with a 30% increase in its spending cap;
all chose the latter. The increased spending caps resulted in about $100 million more federal Medicaid funding to
the territories in FY2009, mostly to Puerto Rico.

Congressional Research Service
16

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Table A-3. Increased FMAPs Under ARRA, First and Second Quarters of FY2010



Calculation of ARRA FMAP 2nd quarter FY10
Hold
Lowest 3-
ARRA
harmless:
Hold
3-month
month
FMAP
highest of
harmless
average
average
ARRA
Regular
1st
FY08-FY10
plus 6.2
unemploy-
unemploy-
Unemploy-
Unemploy-
FMAP 2nd
FMAP
quarter
regular
percentage
ment ending
ment since
ment
ment
Unemployment
quarter
State
FY10
FY10
FMAPs
points
Dec. 2009
Jan. 2006
difference
tier
adjustment
FY10


A
B=A+6.2
C
D
E=C-D
F
G=(100-A-3.1)*F%
H=B+G
Alabama 68.01
77.53
68.01
74.21
10.9
3.3
7.6
11.5
3.32 77.53
Alaska
51.43
61.12
52.48
58.68 8.5 6.0 2.5 8.5 3.78
62.46
Arizona 65.75
75.93
66.20
72.40
9.2
3.6
5.6
11.5
3.53 75.93
Arkansas
72.78
80.46
72.94
79.14 7.6 4.8 2.8 8.5 2.04
81.18
California 50.00
61.59
50.00
56.20
12.3
4.8
7.5
11.5 5.39 61.59
Colorado 50.00
61.59
50.00
56.20
7.4
3.6
3.8
11.5 5.39 61.59
Connecticut 50.00
61.59
50.00
56.20
8.7 4.3 4.4
11.5 5.39
61.59
Delaware 50.21
61.78
50.21
56.41
8.6
3.3
5.3
11.5 5.37 61.78
District of Columbia
70.00
79.29
70.00
76.20
11.6
5.4
6.2
11.5
3.09
79.29
Florida 54.98
67.64
56.83
63.03
11.6
3.3
8.3
11.5
4.61 67.64
Georgia 65.10
74.96
65.10
71.30
10.2
4.3
5.9
11.5
3.66 74.96
Hawai 54.24
67.35
56.50
62.70
6.9
2.2
4.7
11.5
4.65 67.35
Idaho 69.40
79.18
69.87
76.07
9.0
2.8
6.2
11.5
3.11
79.18
Illinois 50.17
61.88
50.32
56.52
10.9
4.4
6.5
11.5
5.36 61.88
Indiana 65.93
75.69
65.93
72.13
9.8
4.4
5.4
11.5
3.56 75.69
Iowa
63.51
72.55
63.51
69.71 6.5 3.7 2.8 8.5 2.84
72.55
Kansas
60.38
69.68
60.38
66.58 6.7 4.0 2.7 8.5 3.10
69.68
Kentucky 70.96
80.14
70.96
77.16
10.7
5.4
5.3
11.5
2.98 80.14
Louisiana 67.61
81.48
72.47
78.67
7.3
3.5
3.8
11.5
2.81 81.48
Maine 64.99
74.86
64.99
71.19
8.1
4.4
3.7
11.5
3.67 74.86
Maryland 50.00
61.59
50.00
56.20
7.3
3.4
3.9
11.5
5.39 61.59
Massachusetts 50.00
61.59
50.00
56.20 9.2 4.4 4.8 11.5
5.39
61.59
Michigan 63.19
73.27
63.19
69.39
14.4
6.7
7.7
11.5
3.88 73.27
Minnesota 50.00
61.59
50.00
56.20
7.6
3.9
3.7
11.5 5.39
61.59
Mississippi 75.67
84.86
76.29
82.49
10.4
6.0
4.4
11.5 2.37
84.86
Missouri 64.51
74.43
64.51
70.71
9.6
4.7
4.9
11.5
3.72 74.43
Montana
67.42
77.99
68.53
74.73 6.6 3.2 3.4 8.5 3.26a 77.99
Nebraska
60.56
68.76
60.56
66.76 4.6 2.8 1.8 5.5 2.00
68.76
Nevada 50.16
63.93
52.64
58.84
12.9
4.2
8.7
11.5
5.09 63.93
CRS-17

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Calculation of ARRA FMAP 2nd quarter FY10
Hold
Lowest 3-
ARRA
harmless:
Hold
3-month
month
FMAP
highest of
harmless
average
average
ARRA
Regular
1st
FY08-FY10
plus 6.2
unemploy-
unemploy-
Unemploy-
Unemploy-
FMAP 2nd
FMAP
quarter
regular
percentage
ment ending
ment since
ment
ment
Unemployment
quarter
State
FY10
FY10
FMAPs
points
Dec. 2009
Jan. 2006
difference
tier
adjustment
FY10


A
B=A+6.2
C
D
E=C-D
F
G=(100-A-3.1)*F%
H=B+G
New Hampshire
50.00
61.59
50.00
56.20
6.9
3.4
3.5
11.5
5.39
61.59
New Jersey
50.00
61.59
50.00
56.20
9.9
4.2
5.7
11.5
5.39
61.59
New Mexico
71.35
80.49
71.35
77.55
8.1
3.5
4.6
11.5
2.94
80.49
New York
50.00
61.59
50.00
56.20
8.9
4.3
4.6
11.5
5.39
61.59
North Carolina
65.13
74.98
65.13
71.33
10.9
4.5
6.4
11.5
3.65
74.98
North
Dakota
63.01
69.95
63.75
69.95 4.3 3.0 1.3 0.0 0.00b 69.95
Ohio 63.42
73.47
63.42
69.62
10.8
5.3
5.5
11.5
3.85
73.47
Oklahoma 64.43
75.83
67.10
73.30
6.9
3.3
3.6
11.5 3.43
76.73
Oregon 62.74
72.87
62.74
68.94
10.7
5.0
5.7
11.5
3.93 72.87
Pennsylvania 54.81
65.85
54.81
61.01
8.7 4.3 4.4 11.5 4.84
65.85
Rhode Island
52.63
63.92
52.63
58.83
12.5
4.8
7.7
11.5
5.09
63.92
South Carolina
70.32
79.58
70.32
76.52
12.3
5.5
6.8
11.5
3.06
79.58
South
Dakota 62.72
70.80
62.72
68.92 4.7 2.7 2.0 5.5 1.88
70.80
Tennessee 65.57
75.37
65.57
71.77
10.7
4.5
6.2
11.5 3.60
75.37
Texas 58.73
70.94
60.56
66.76
8.2
4.4
3.8
11.5
4.18 70.94
Utah 71.68
80.78
71.68
77.88
6.6
2.5
4.1
11.5
2.90
80.78
Vermont
58.73
69.96
59.45
65.65 6.7 3.5 3.2 8.5 4.31a 69.96
Virginia 50.00
61.59
50.00
56.20
6.8
2.8
4.0
11.5
5.39 61.59
Washington 50.12
62.94
51.52
57.72
9.2 4.4 4.8
11.5 5.22
62.94
West Virginia
74.04
83.05
74.25
80.45
8.9
4.2
4.7
11.5
2.60
83.05
Wisconsin 60.21
70.63
60.21
66.41
8.6
4.4
4.2
11.5 4.22
70.63
Wyoming 50.00
61.59
50.00
56.20
7.5
2.8
4.7
11.5 5.39 61.59
Source: 75 Federal Register 5325 (February 2, 2010) and 22807 (April 30, 2010).
a. Unemployment adjustments are held harmless (through the first quarter of FY2011) from reductions. Although Montana and Vermont are currently in the middle
unemployment tier, they were previously in the highest tier. As a result, their unemployment adjustments are calculated as if they were still in the highest tier.
b. North Dakota does not receive an unemployment adjustment because its current unemployment rate has not exceeded its lowest unemployment rate by at least 1.5
percentage points. In comparison, 13 states failed to qualify for an unemployment adjustment when ARRA FMAPs were provided for the first two quarters of FY2009.

CRS-18

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Medicaid: The Federal Medical Assistance Percentage (FMAP)


Author Contact Information

Evelyne P. Baumrucker

Analyst in Health Care Financing
ebaumrucker@crs.loc.gov, 7-8913

Acknowledgments
The author would like to thank April Grady, former CRS Specialist in Health Care Financing, who
authored the original report. Additionally, Chris Peterson, former CRS Specialist in Health Care
Financing, contributed to the original report.

Congressional Research Service
19

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