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Medicaid: The Federal Medical Assistance
Percentage (FMAP)

Alison Mitchell
Analyst in Health Care Financing
Evelyne P. Baumrucker
Analyst in Health Care Financing
January 27, 2012
Congressional Research Service
7-5700
www.crs.gov
RL32950
CRS Report for Congress
Pr
epared for Members and Committees of Congress
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

Summary
Medicaid is a means-tested entitlement program that finances the delivery of primary and acute
medical services as well as long-term care. Medicaid is jointly funded by the federal government
and the states. The federal government’s share of a state’s expenditures is called the federal
medical assistance percentage (FMAP) rate. The remainder is referred to as the nonfederal share,
or state share.
Generally determined annually, the FMAP formula 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 FY2013, regular
FMAP rates range from 50.00% to 74.43%. The FMAP rate is used to reimburse states for the
federal share of most Medicaid expenditures, but exceptions to the regular FMAP rate have been
made for certain states, situations, populations, providers, and services.
Some recent issues related to FMAP include state fiscal conditions, the disaster-related FMAP
adjustment, and the exclusion of certain employer contributions from the FMAP calculation.
While the fiscal environment for states is improving, states continue to face fiscal challenges,
which makes it difficult for states to finance the state share of Medicaid expenditures. The Patient
Protection and Affordable Care Act (ACA, P.L. 111-148 as amended) included a provision
providing a disaster-recovery FMAP adjustment for states that have experienced a major,
statewide disaster. The Children’s Health Insurance Program Reauthorization Act of 2009
(CHIPRA, P.L. 111-3) included a provision allowing a state’s FMAP rate to be adjusted if the
state had significantly disproportionate employer pension and insurance fund contributions in any
calendar year since 2003.
Legislation was enacted during the 111th Congress that impacts the FMAP rate. First, the
American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5) provided assistance to
states through a temporary FMAP rate increase that was later extended by P.L. 111-226. Also,
ACA contains a number of provisions affecting FMAP rates. Most notably, ACA provides initial
FMAP rates of up to 100% for certain “newly eligible” individuals.
During the 112th Congress, there has been a focus on reducing the federal deficit; controlling
federal Medicaid spending is often discussed as a means to reduce federal expenditures. For this
reason, the FY2012 House budget resolution proposed restructuring Medicaid from an
entitlement program to a block grant, and most federal deficit reduction proposals include
Medicaid provisions.
This report describes the FMAP calculation used to reimburse states for most Medicaid
expenditures, and it lists the statutory exceptions to the regular FMAP rate. In addition, this report
discusses other FMAP-related issues, including state fiscal conditions, the temporary FMAP rate
increase, the exclusion of certain employer contributions, FMAP changes in ACA, the Medicaid
proposal included in the House budget resolution, and other federal deficit reduction proposals.

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Medicaid: The Federal Medical Assistance Percentage (FMAP)

Contents
Introduction...................................................................................................................................... 1
The Federal Medical Assistance Percentage.................................................................................... 1
How FMAP Rates Are Calculated............................................................................................. 2
Data Used to Calculate State FMAP Rates................................................................................ 2
Factors That Affect FMAP Rates............................................................................................... 3
FY2013 Regular FMAP Rates................................................................................................... 4
Exceptions ................................................................................................................................. 7
Recent Issues ................................................................................................................................. 12
State Fiscal Conditions ............................................................................................................ 12
Disaster-Recovery Adjusted FMAP Rate ................................................................................ 14
Exclusion of Certain Employer Contributions from FMAP Rate Calculations....................... 16
Legislation During the 111th Congress........................................................................................... 18
Temporary FMAP Rate Increase in ARRA and Six-Month Extension.................................... 18
FMAP Changes in the ACA .................................................................................................... 20
Legislation During the 112th Congress........................................................................................... 23
House Budget Resolution Proposed Block Grant.................................................................... 23
Federal Deficit Reduction........................................................................................................ 24

Figures
Figure 1. State Distribution of FMAP Rates.................................................................................... 5
Figure 2. FMAP Rate Changes for States from FY2012 to FY2013 ............................................... 6

Tables
Table 1. Exceptions to the Regular FMAP Rates for Medicaid....................................................... 7
Table 2. Calculation for Louisiana’s Disaster-Recovery Adjusted FMAP Rate ............................ 15
Table 3. FMAP Rates for ACA Medicaid Expansion .................................................................... 21
Table A-1. Regular FMAP Rates by State, FY2005-FY2013........................................................ 27
Table A-2. Temporary FMAP Rate Increase Under ARRA and Extended by P.L. 111-226 .......... 30
Table A-3. Calculation of Temporary FMAP Rate Increase by State, 3rd Quarter FY2011 ........... 33

Appendixes
Appendix. Regular and Temporary Increased FMAP Rates for Medicaid, by State ..................... 26

Contacts
Author Contact Information........................................................................................................... 36
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

Acknowledgments ......................................................................................................................... 36

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Medicaid: The Federal Medical Assistance Percentage (FMAP)

Introduction
Medicaid is a means-tested entitlement program that finances the delivery of primary and acute
medical services as well as long-term care.1 Medicaid is jointly funded by the federal government
and the states. Participation in Medicaid is voluntary for states, though all states, the District of
Columbia, and the territories choose to participate. Each state designs and administers its own
version of Medicaid under broad federal rules. While states that choose to participate in Medicaid
must comply with all federal mandated requirements, state variability is the rule rather than the
exception in terms of eligibility levels, covered services, and how those services are reimbursed
and delivered. 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 individuals under the age of 65 with income up to 133%
of the federal poverty level.2 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.3
This report describes the federal medical assistance percentage (FMAP) calculation used to
reimburse states for most Medicaid expenditures, and it lists the statutory exceptions to the
regular FMAP rate. In addition, this report discusses other FMAP-related issues, including state
fiscal conditions, the temporary FMAP rate increase, the exclusion of certain employer
contributions, FMAP changes in the Patient Protection and Affordable Care Act (ACA, P.L. 111-
148 as amended), the Medicaid proposal included in the House budget resolution, and other
federal deficit reduction proposals.
The Federal Medical Assistance Percentage
The federal government’s share of most Medicaid service costs is determined by the FMAP rate,
which varies by state and is determined by a formula set in statute. The FMAP rate is used to
reimburse states for the federal share of most Medicaid expenditures, but exceptions to the
regular FMAP rate have been made for certain states, situations, populations, providers, and
services.4
An enhanced FMAP (E-FMAP) rate 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 rate applies and is paid out of the state’s

1 For more information about the Medicaid program, see CRS Report RL33202, Medicaid: A Primer.
2 The Patient Protection and Affordable Care Act (ACA, P.L. 111-148 as amended) establishes 133% of federal poverty
level (FPL) based on modified adjusted gross income (MAGI) as the new mandatory minimum Medicaid income
eligibility level. The law also specifies that an income disregard in the amount of 5% FPL will be deducted from an
individual’s income when determining Medicaid eligibility based on MAGI, thus the effective upper income eligibility
threshold for such individuals in this new eligibility group will be 138% FPL. On November 21, 2011, President
Obama signed into law P.L. 112-56, which will change the definition of income to include non-taxable Social Security
in the definition of MAGI.
3 For a broader overview of financing issues, see CRS Report RS22849, Medicaid Financing.
4 More detail about the exceptions to the regular FMAP rate is provided under the heading “Exceptions.”
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

federal allotment. The E-FMAP rate is calculated by reducing the state share under the regular
FMAP rate by 30%.5
The FMAP rate is also used in determining the phased-down state contribution (“clawback”) for
Medicare Part D, 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.
How FMAP Rates Are Calculated
The FMAP formula compares each state’s per capita income relative to U.S. per capita income.
The formula 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 formula6 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 rate of 55% (i.e., state share of 45%). In addition, the
formula’s squaring of income provides higher FMAP rates to states with below-average incomes
than they would otherwise receive (and vice versa, subject to the 50% minimum).7
The Department of Health & Human Services (HHS) usually publishes FMAP rates for an
upcoming fiscal year in the Federal Register during the preceding November. This time lag
between announcement and implementation provides an opportunity for states to adjust to FMAP
rate changes, but it also means that the per capita income amounts used to calculate FMAP rates
for a given fiscal year are several years old by the time the FMAP rates take effect.
In the Appendix to this report, Table A-1 shows regular FMAP rates for each of the 50 states and
the District of Columbia from FY2005-FY2013.
Data Used to Calculate State FMAP Rates
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 FY2013 FMAP calculations, HHS used state
per capita personal income data for 2008, 2009, and 2010 that became available from the
Department of Commerce’s Bureau of Economic Analysis (BEA) in September 2011. The use of
a three-year average helps to moderate fluctuations in a state’s FMAP rate over time.

5 See CRS Report R40444, State Children’s Health Insurance Program (CHIP): A Brief Overview.
6 Section 1905(b) of the Social Security Act.
7 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 rate of 50.39%; if the formula did not include a squaring of per capita
income, it would instead produce a higher FMAP rate of 52.75%. In state B with a below-average per capita income of
$38,000, the FMAP formula produces an FMAP rate of 59.39%; if the formula did not include a squaring of per capita
income, it would instead produce a lower FMAP rate of 57.25%.
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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.8 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).9
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 2008
state per capita personal income data published by BEA in September 2010 (used in the
calculation of FY2012 FMAP rates) differed from the 2008 state per capita personal income data
published in September 2011 (used in the calculation of FY2013 FMAP rates).
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 FMAP Rates
Several factors affect states’ FMAP rates. 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,

8 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.
9 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)

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 rate changes.
In addition to annual revisions of per capita personal income data, comprehensive NIPA revisions
undertaken every four to five years may also influence regular FMAP rates (e.g., because of
changes in the definition of personal income). The impact on FMAP rates will depend on whether
the changes are broad (affecting all states) or more selective (affecting only certain states or
industries).
FY2013 Regular FMAP Rates
Regular FMAP rates for FY2013 (the federal fiscal year that begins on October 1, 2012) were
calculated and published November 30, 2011, in the Federal Register.10 In the Appendix to this
report, Table A-1 shows FY2013 regular FMAP rates for each of the 50 states and the District of
Columbia. Figure 1 shows the state distribution of regular FMAP rates for FY2013. Fourteen
states will have the statutory minimum FMAP rate of 50%, and Mississippi will have the highest
FMAP rate of 74.43%.


10 Federal Register Vol. 76, No. 230 / Wednesday, November 30, 2011 / Notices, 47061, available at
http://www.gpo.gov/fdsys/pkg/FR-2011-11-30/pdf/2011-30860.pdf.
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Figure 1. State Distribution of FMAP Rates
FY2013

Source: Prepared by CRS using FY2013 regular FMAP rates.
Notes: State-by-state FY2013 regular FMAP rates are listed in Table A-1.
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

As shown in Figure 2, from FY2012 to FY2013, the regular FMAP rates for 36 states will
change, while the regular FMAP rates for the remaining 15 states (including the District of
Columbia) will remain the same.11
Figure 2. FMAP Rate Changes for States from FY2012 to FY2013

Source: Prepared by CRS using FY2012 and FY2013 regular FMAP rates.
Notes: Specific FMAP rate changes for each state are listed in Table A-1.
For most of the states experiencing an FMAP rate change from FY2012 to FY2013, the change
will be less than one percentage point. The regular FMAP rate for seven states will increase by
less than one percentage point, and the FMAP rate for 17 states will decrease by less than one
percentage point.
For states that will experience an FMAP rate change greater than one percentage point from
FY2012 to FY2013, five states will experience an FMAP rate increase of greater than one
percentage point, and seven states will experience an FMAP rate decrease of greater than one
percentage point. Nevada will have the largest FMAP rate increase with a 3.54 percentage point
increase, and North Dakota will have the largest FMAP rate decrease with a 3.13 percentage point
decrease.
Two states will have FY2013 FMAP rates that are not calculated according to the regular FMAP
formula: the District of Columbia and Louisiana. The FMAP rate for the District of Columbia has
been set in statute at 70% since 1998, and Louisiana will receive a disaster-recovery adjustment
(discussed in further detail below) increase over its FY2013 regular FMAP rate.

11 All the states with no change to their regular FMAP rates from FY2012 to FY2013 receive the statutory minimum
FMAP rate of 50%, and the regular FMAP rate for the District of Columbia is statutorily set at 70%.
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Exceptions
Although FMAP rates are generally determined by the formula described above, Table 1 lists
exceptions that have been added to the Medicaid statute over the years. Table 1 identifies whether
the exception is a current (i.e., the exception current applies), future (i.e., the exception will apply
beginning at the specified date), or past (i.e., the exception no longer applies) FMAP rate
exception.
Table 1. Exceptions to the Regular FMAP Rates for Medicaid
Past,
Current,
or Future
Exception Description Citations
Exception
Territories and Certain States
Territories
As of July 1, 2011, FMAP rates for the territories (Puerto Rico, Most recently P.L.
Current
American Samoa, the Northern Mariana Islands, Guam, and
111-148, as
the Virgin Islands) were increased from 50% to 55%. Unlike
amended by P.L.
the 50 states and the District of Columbia, the territories are
111-152; SSA
subject to federal spending caps. The 55% also applies for
§1905(b), 1108(f)
purposes of computing the enhanced FMAP rate for CHIP.
and (g)
District of
As of FY1998, the District of Columbia’s FMAP rate is set at
P.L. 105-33; SSA
Current
Columbia
70% (without this exception, it would be at the statutory
§1905(b)
minimum of 50%). The 70% also applies for purposes of
computing the enhanced FMAP rate for CHIP.
Alaska
Alaska’s FMAP rate was set in statute for FY1998-FY2000 at
P.L. 105-33
Past
59.80%; used an alternative formula for FY2001-FY2005 that
§4725(a); P.L. 106-
reduced the state’s per capita income by 5% (thereby
554 Appendix F
increasing its FMAP rate); and was held at its FY2005 level for
§706; P.L. 109-171
FY2006-FY2007. These provisions also applied for purposes of
§6053(a)
computing the enhanced FMAP rate for CHIP.
Special Situations
Adjustment for
Beginning in CY2011, a disaster-recovery FMAP adjustment is
P.L. 111-148, as
Current
disaster
available for states in which (1) during one of the preceding
amended by P.L.
recovery
seven years, the President declared a major disaster under the
111-152; SSA
Stafford Act and every county in the state warranted at least
§1905(aa); 75
public assistance under that act and (2) the regular FMAP rate
Federal Register
declines by a specified amount. To trigger the adjustment, a
80501 (December
state’s regular FMAP rate must be at least three percentage
22, 2010)
points less than such state’s last year’s regular FMAP rate plus
(if applicable) any hold harmless increase under P.L. 111-5; the
adjustment is an FMAP rate increase equal to 50% of the
difference between the two. To continue receiving the
adjustment, the state’s regular FMAP rate must be at least
three percentage points less than last year’s adjusted FMAP
rate; the adjustment is an FMAP rate increase equal to 25% of
the difference between the two. (Discussed in further detail in
the text.)
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

Past,
Current,
or Future
Exception Description Citations
Exception
Adjustment for
As of FY2006, significantly disproportionate employer pension
P.L. 111-3 §614; 75 Current
certain employer and insurance fund contributions will be excluded from the
Federal Register
contributions
calculation of Medicaid FMAP rates. This will have the effect of 63482 (October
reducing certain states’ per capita personal income relative to
15, 2010)
the national average, which in turn could increase their
Medicaid FMAP rates. Any identifiable employer contributions
towards pensions or other employee insurance funds are
considered to be significantly disproportionate if the increase
in the amount of employer contributions accrued to residents
of a state exceeds 25% of the total increase in personal
income in that state for the year involved. To date, no state
has qualified for this adjustment. (Discussed in further detail in
the text.)
State fiscal relief, FMAP rates were increased from the first quarter of FY2009
P.L. 111-5 §5001,
Past
FY2009-FY2011
through the third quarter of FY2011, providing states with
as amended by P.L.
more than $100 billion (about $84 billion for the original
111-226 §201
provision and $16 billion for a six-month extension) in
additional funds. All states received a hold harmless to prevent
any decline in regular FMAP rates 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 percentage
point increase phased down to 3.2 and then 1.2; qualifying
states received 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 rate along with a 30% increase in its
cap; all chose the latter. States were required to meet certain
requirements in order to receive the increase (see text for
details).
Adjustment for
In computing FMAP rates for any year after 2006 for a state
P.L. 109-171
Past
Hurricane
that the Secretary of HHS determines has a significant number
§6053(b); 72
Katrina
of Hurricane Katrina evacuees as of October 1, 2005, the
Federal Register
Secretary must disregard such evacuees and their incomes.
3391 (January 25,
Although it was labeled as a “hold harmless for Katrina
2007) and 44146
impact,” the provision language required evacuees to be
(August 7, 2007)
disregarded even if their inclusion would increase a state’s
FMAP rate. Due to lags in the availability of data used to
calculate FMAP rates, FY2008 was the first year to which the
provision applied. HHS proposed and finalized a methodology
that prevented the lowering of any FY2008 FMAP rates and
increased the FY2008 FMAP rate 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 FMAP rates 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 FMAP rates after FY2008. The provision also applied
for purposes of computing the enhanced FMAP rate for CHIP.
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

Past,
Current,
or Future
Exception Description Citations
Exception
State fiscal relief, FMAP rates for the last two quarters of FY2003 and the first
P.L. 108-27
Past
FY2003-FY2004
three quarters of FY2004 were not allowed to decline (i.e.,
§401(a)
were held 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 rate, 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).
Certain Populations
“Newly eligible”
Historically, Medicaid eligibility generally has been limited to
P.L. 111-148, as
Future
individuals
low-income individuals who fall into specified categories
amended by P.L.
enrolled in new
(typical y children, parents, pregnant women, disabled, and
111-152; SSA
eligibility group
elderly). As of CY2014, states will be required to cover
§1905(y)
through 133%
individuals under a new eligibility group for nonelderly,
FPL
nonpregnant adults at or below 133% FPL. The law specifies an
income disregard in the amount of 5% FPL will be deducted
from an individual’s income when determining Medicaid
eligibility based on MAGI, thus the effective upper income
eligibility threshold for such individuals in this new eligibility
group will be 138% FPL. An increased FMAP rate will be
provided for services rendered to “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 enrol ed
because of limits or caps on waiver enrollment. The FMAP
rates for “newly eligible” individuals will equal:
CY2014-CY2016 = 100%; CY2017 = 95%; CY2018 = 94%;
CY2019 = 93%; CY2020+ = 90%.
“Expansion
Although Medicaid eligibility has generally been limited to
P.L. 111-148, as
Future
state” individuals certain categories of individuals, some states provide health
amended by P.L.
enrolled in new
coverage for all low-income individuals using Medicaid waivers
111-152; SSA
eligibility group
and/or state-only funds. As a result, they have few or no
§1905(z)(2)
through 133%
individuals who wil qualify for the “newly eligible” FMAP rate
FPL
beginning in CY2014. To address this issue, as of CY2014, an
increased FMAP rate 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
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” FMAP rates is
[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” FMAP rates
to vary based on a state’s regular FMAP rate until CY2019, at
which point they will equal “newly eligible” FMAP rates:
CY2014 = at least 75%; CY2015 = at least 80%; CY2016 = at
least 85%; CY2017 = at least 86%; CY2018 = at least 90%;
CY2019 = 93%; CY2020+ = 90%.
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

Past,
Current,
or Future
Exception Description Citations
Exception
Other
During CY2014 and CY2015, an FMAP rate increase of 2.2
P.L. 111-148, as
Future
“expansion
percentage points is available for “expansion states” that (1)
amended by P.L.
state” individuals the Secretary of HHS determines will not receive any FMAP
111-152; SSA
rate increase for “newly eligible” individuals and (2) have not
§1905(z)(1)
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 rate 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.
Certain women
For states that opt to cover certain women with breast or
P.L. 106-354, as
Current
with breast or
cervical cancer who do not qualify for Medicaid under a
amended by P.L.
cervical cancer
mandatory eligibility pathway and are otherwise uninsured,
107-121; SSA
expenditures for these women are reimbursed using the
§1905(b)
enhanced FMAP rate that applies to CHIP.
Qualifying
States are required to pay Medicare Part B premiums for
P.L. 105-33, most
Current
Individuals
Medicare beneficiaries with income between 120% and 135%
recently extended
program
FPL and limited assets (referred to as “qualifying individuals”),
via P.L. 111-309;
up to a specified dollar allotment. They receive 100% federal
SSA §1933(d)
reimbursement for these costs, which are financed at the
federal level by a transfer of funds from Medicare to Medicaid.
This provision has been extended numerous times and is
currently funded through February 29, 2012.
Certain Providers
Primary care
During CY2013 and CY2014, states are required to provide
P.L. 111-148, as
Future
payment rates
Medicaid payments that are at or above Medicare rates for
amended by P.L.
primary care services (defined as evaluation and management
111-152; SSA
and certain administration of immunizations) furnished by a
§1902(a)(13)(C)
physician with a primary specialty designation of family, general
internal, or pediatric medicine. States will receive 100% federal
reimbursement for expenditures attributable to the amount by
which Medicare exceeds their Medicaid payment rates in effect
on 7/1/2009.
Indian Health
States receive 100% federal reimbursement for services
P.L. 94-437; SSA
Current
Service facility
provided through an Indian Health Service facility.
§1905(b)
Certain Services
Certain
As of CY2013, states that opt to cover—with no cost
P.L. 111-148, as
Future
preventive
sharing—clinical preventive services recommended with a
amended by P.L.
services and
grade of A or B by the United States Preventive Services Task
111-152; SSA
immunizations
Force (USPSTF) and adult immunizations recommended by the §1905(b)
Advisory Committee on Immunization Practices (ACIP) wil
receive a one percentage point increase in their FMAP rate 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
As of CY2013, states that opt to cover USPSTF preventive
P.L. 111-148, as
Future
cessation for
services and ACIP adult immunizations as noted above will
amended by P.L.
pregnant women also receive a one percentage point increase in their FMAP
111-152; SSA
rate for smoking cessation services that are mandatory for
§1905(b)
pregnant women.
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Past,
Current,
or Future
Exception Description Citations
Exception
Family planning
States receive 90% federal reimbursement for family planning
P.L. 92-603; SSA
Current
services and supplies.
§1903(a)(5)
Health homes
As of CY2011, states have a new option for providing a
P.L. 111-148, as
Current
“health home” and associated services to certain individuals
amended by P.L.
with chronic conditions. They will receive 90% federal
111-152; SSA
reimbursement for these services for the first eight quarters
§1945(c)(1)
that the health home option is in effect in the state.
Home and
As of FY2011, states have a new option for providing home
P.L. 111-148, as
Current
community-
and community-based attendant services and supports for
amended by P.L.
based attendant
certain individuals at or below 150% FPL, or a higher income
111-152; SSA
services and
level applicable to those who require an institutional level of
§1915(k)(2)
supports
care. They will receive a six percentage point increase in their
regular FMAP rate for these services.
State balancing
During FY2011-FY2015, state balancing incentive payments are P.L. 111-148, as
Current
incentive
available under certain conditions for states in which less than
amended by P.L.
payments
50% of Medicaid expenditures for long-term services and
111-152, §10202
supports (LTSS) are non-institutional. Qualifying states with
less than 25% non-institutional LTSS must plan to achieve a
25% target and can receive a five percentage point increase in
their FMAP rate 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 FMAP rates is limited to $3 billion during the period.
Administrative Activities
Training of
States receive a 75% FMAP rate for costs attributable to
SSA
Current
Medical
compensation or training of skilled professional medical
§1903(a)(2)(A)&(B)
Personnel
personnel, and staff directly supporting such personnel.

Immigration
States receive 100% federal reimbursement for costs
SSA §1903(a)(4)
Current
Verification
attributable to the cost of implementation and operation of an
System
immigration status verification system.
Fraud Control
States receive 75% FMAP rate for state expenditures related
SSA §1903(a)(6)
Current
Unit
to the operation of a state Medicaid fraud control unit.
Preadmission
State expenditures attributable to preadmission screening and
SSA
Current
Screening
resident review for individuals with mental illness or mental
§1903(a)(2)(C)
retardation who are admitted to a nursing facility receive 75%
FMAP rate.
Survey and
States receive 75% FMAP rate for state expenditures related
SSA
Current
Certification
to survey and certification of nursing facilities.
§1903(a)(2)(D)
Managed Care
States receive 75% FMAP rate for state expenditures related
SSA
Current
Review
to performance of medical and utilization review activities or
§1903(a)(3)(C)
Activities
external independent review of managed care activities.

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Past,
Current,
or Future
Exception Description Citations
Exception
Claims and
States receive 90% FMAP rate for the design, development, or
SSA
Current
Eligibility
installation of mechanized claims systems and 75% FMAP rate
§1903(a)(3)(A) and
Systems
for operating mechanized claims systems. Both federal
(B); 76 Federal
reimbursement percentages are subject to certain criteria set
Register 21950

by the Secretary of HHS, which includes whether the activity
(April 19, 2011)
is likely to provide more efficient, economical, and effective
administration of claims processing. CMS published a final rule

to amend the definition of Mechanized Claims Processing and
Information Retrieval systems to include systems used for
eligibility determination, enrollment, and eligibility reporting
activities thereby making the 90% FMAP rate available for the
design, development and installation or enhancement of
eligibility determination systems until December 31, 2015, and
75% FMAP rate for maintenance and operations available for
such systems beyond that date as long as certain requirements
are met.
Translation or
Administrative expenditures for translation or interpretation
P.L. 111-3; SSA
Current
Interpretation
services in connection with the “enrollment of, retention of,
§1903(a)(2)(E);
Services
and use of services” under Medicaid receive 75% FMAP rate.
State Medicaid
For CHIP, the increased match is 75%, or the state’s enhanced
Director Letter,
FMAP rate plus 5 percentage points, whichever is higher, and
State Health
the CHIP increased match is subject to the 10% cap on
Official 10-007,
administrative expenditures. The increased FMAP rate for
CHIPRA 18, July 1,
translation or interpretation services is only available for
2010.
eligible expenditures claimed as administrative and not
expenditures claimed as medical assistance-related (which
receive each state’s regular FMAP rate).
General
Remaining state expenditures found necessary for the proper
SSA §1903(a)(7)
Current
Administration
and efficient administration of the state plan receive a 50%
FMAP rate.
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 rate for CHIP.
SSA = Social Security Act; FPL = federal poverty level; CHIPRA = Children’s Health Insurance Program
Reauthorization Act.
Recent Issues
State Fiscal Conditions
During periods of economic downturn, state Medicaid programs face dual pressures. First,
program enrollment increases at a faster rate than otherwise anticipated, when job and income
losses lead more people to become eligible. Second, it can be more difficult to finance the
nonfederal (i.e., state) share of Medicaid costs, when state revenues fall below expected levels.
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Medicaid: The Federal Medical Assistance Percentage (FMAP)

Regarding enrollment, researchers have estimated that for every 1% increase in national
unemployment, Medicaid enrollment increases by 1 million individuals.12 During the 2007
national recession period (i.e., December 2007 through June of 2009),13 the Bureau of Labor
Statistics reported the seasonally adjusted national unemployment rate rose from 5.0% in
December of 2007 to 9.5% in June of 2009, peaking at 10.1% in October 2010 (four months after
the official end of the national recession).14 Over roughly the same period, the estimated number
of individuals ever enrolled in Medicaid increased by 8.7%, from 58.8 million in FY2008 to an
estimated 67.7 million in FY2010.15 On the revenue side, it is estimated that total state tax
revenues declined by 10.2% from the fourth quarter of 2007 to the fourth quarter of 2009 due to
the 2007 recession.16 To help mitigate state fiscal conditions, the American Recovery and
Reinvestment Act of 2009 (ARRA, P.L. 111-5) included a temporary increase to FMAP rates to
help states maintain their Medicaid programs and free up funds that states would have otherwise
used for Medicaid to address other state budgetary needs.
When viewed nationally, the growth in Medicaid expenditures has caused Medicaid to become
the largest or second-largest item in state budgets depending on how it is measured. Medicaid
accounted for 22.3% of total state budgets (i.e., includes funds from all state and federal sources)
in state fiscal year (SFY) 2010. To date, most of the increase in Medicaid expenditures has been
absorbed by the federal government through the temporary increase to FMAP rates. While total
Medicaid expenditures grew as a proportion of total state budgets, state Medicaid expenditures as
a percent of state general fund spending (i.e., the portion that states must finance on their own
through taxes and other means) fell from 16.9% in SFY2008 to 15.8% in SFY2010.17
Even with the temporary increase to FMAP rates moderating the impact of Medicaid expenditure
growth on the state-funded portion of state budgets, many states faced budget deficits. A recent
study from the Government Accountability Office (GAO) notes that while these fiscal tensions
exist universally across all states during an economic downturn, any given state’s capacity to
finance the state share of Medicaid costs to support new program enrollment may differ based on
variables such as the state’s economic condition, revenue structure, Medicaid program design, etc.
Moreover, among states, economic downturns vary widely in their onset, depth and duration, and
generally do not coincide exactly with national recessions.18
Even though the national recession has officially ended and state tax revenues have shown
continued consecutive quarters of growth, state revenues have not fully rebounded. State tax
revenues at the national level were still 5.5% lower in the first quarter of 2011 than in the same

12 J. Hollahan and A. Garrett, “Rising Unemployment, Medicaid and the Uninsured,” Kaiser Commission on Medicaid
and the Uninsured, Washington, D.C., January 2009.
13 Recession dates are designated by the National Bureau of Economic Research (NBER).
14 Available at http://data.bls.gov/pdq/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS14000000.
15 MACPAC, March 2011 Report to the Congress on Medicaid and CHIP, Table 2, March 2011. Federal fiscal year
2008 ran from October 1, 2007, through September 30, 2008, and federal fiscal year 2010 ran from October 1, 2009,
through September 30, 2010.
16 GAO, Medicaid: Improving Responsiveness to Federal Assistance to States During Economic Downturns, GAO-11-
395 (Washington, D.C.: March 2011).
17 SFY2010 data based on 50-state preliminary actual survey data presented in the following report: The Fiscal Survey
of the States: Examining Fiscal 2009-2011 State Spending
, National Governors Association and National Association
of State Budget Officers, Fall 2011.
18 GAO, Medicaid: Improving Responsiveness to Federal Assistance to States During Economic Downturns, GAO-11-
395 (Washington, D.C.: March 2011).
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quarter of 2008.19 As a result, nearly every state implemented at least one new Medicaid cost
containment policy in SFY2010, SFY2011, and SFY2012.20 Because states are prohibited from
curbing the cost of Medicaid through restricting eligibility standards due to the maintenance of
effort (MOE) requirements initially enacted under ARRA and later expanded and extended under
ACA,21 over the past few years, states have focused cost containment strategies on reducing
provider rates, making changes to their benefit packages, or implementing limitations on the use
of benefits.22
In compiling their SFY2012 budgets, states faced difficult decisions with respect to the Medicaid
program because the temporary FMAP rate increase ended on June 30, 2011 (the last day of
SFY2011 for most states). States had to make up for the loss of the enhanced federal Medicaid
funding before state revenues have rebounded. Further, because of Medicaid’s federal-state
financing structure, for states to generate $1 of savings in the state share of Medicaid spending,
they will be required to reduce their overall Medicaid spending by $2 to almost $4, depending on
each state’s regular FMAP rate. For example, in a state with a FMAP rate of 50%, to obtain state-
share savings in the amount of $20 million would require total federal and state Medicaid
spending to be reduced by approximately $40 million. In a state with a FMAP rate of 65%, to
obtain state-share savings in the amount of $20 million would require total federal and state share
Medicaid spending to be reduced by approximately $57 million. The degree to which a state is
willing to cut the nonfederal share of its Medicaid spending might depend in part on the loss of
federal dollars it would also face as a result of these deductions.
Historically, it has taken three to five years from the onset of a recession for state revenues to
recover, and there is evidence that states’ recovery from the most recent recession will take longer
than other recent recessions.23 Thus, while the fiscal environment for states is improving, states
continue to face fiscal challenges.
Disaster-Recovery Adjusted FMAP Rate
The Patient Protection and Affordable Care Act (ACA, P.L. 111-148 as amended) added a
disaster-recovery FMAP adjustment for states that have experienced a major, statewide disaster.
This adjustment was available to states beginning the fourth quarter of FY2011.24

19 L. Dadayan and R.B. Ward, PIT, Overall Tax Revenues Show Strong Growth in Second Quarter: Local Property
Taxes Declined for the Third Consecutive Quarter, State Revenue Report Number 85, The Nelson A. Rockefeller
Institute of Government, Albany, New York, October 2011.
20 Vernon K. Smith, Ph.D., Kathleen Gifford, and Eileen Ellis (Health Management Associates), et al., Moving Ahead
Amid Fiscal Challenges: A Look at Medicaid Spending, Coverage and Policy Trends, Results from a 50-State
Medicaid Budget Survey for State Fiscal Years 2011 and 2012, Kaiser Commission on Medicaid and the Uninsured,
Washington, DC, October 2011.
21 The MOE requirements are discussed in further detail in the “FMAP Changes in the ACA ”section of this report.
22 Vernon K. Smith, Ph.D., Kathleen Gifford, and Eileen Ellis (Health Management Associates), et al., Moving Ahead
Amid Fiscal Challenges: A Look at Medicaid Spending, Coverage and Policy Trends, Results from a 50-State
Medicaid Budget Survey for State Fiscal Years 2011 and 2012, Kaiser Commission on Medicaid and the Uninsured,
Washington, DC, October 2011.
23 Donald J. Boyd, The State of State Budgets, The Nelson A. Rockefeller Institute of Government, National
Conference of State Legislatures Fiscal Leaders Seminar, San Diego, CA, December 9, 2009.
24 Initially, the disaster-recovery FMAP adjustment was suppose to be available beginning January 1, 2011. However,
the disaster-recovery adjusted FMAP rate was not available until the fourth quarter of FY2011 due to the six month
extension of the temporary FMAP rate increases.
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There are two criteria for states to qualify for the disaster-recovery FMAP adjustment. First,
during the preceding seven years, the President must have declared a major disaster in the state
where every county in the state was eligible for public assistance. Second, the state’s regular
FMAP rate must have declined at least three percentage points from the prior year’s FMAP rate.25
In the first year a state qualifies for the disaster-recovery adjusted FMAP rate, the FMAP rate
shall be equal to the regular FMAP rate as determined for the fiscal year, plus 50% of the
difference between the current year’s regular FMAP rate and the preceding year’s FMAP rate. For
the second and subsequent years a state qualifies for the adjustment, the FMAP rate shall be equal
to the FMAP rate as determined for the preceding fiscal year, including any disaster-recovery
adjustment for that year, plus 25% of the difference between the current year’s regular FMAP rate
and the preceding year’s disaster-recovery adjusted FMAP rate.
The formula for the disaster-recovery FMAP adjustment causes the state’s FMAP rate to increase,
rather than phase down, each year a state qualifies for the adjustment. As a result, the assistance
provided to states will be higher than initially projected.26
Louisiana was the only state that meets both requirements in FY2011, FY2012, and FY2013.
Table 2 shows the calculation for Louisiana’s disaster-recovery adjusted FMAP rate for each of
those years.
Table 2. Calculation for Louisiana’s Disaster-Recovery Adjusted FMAP Rate
FY2011 to FY2013
First Year

Regular
Disaster-Recovery
Disaster-
FMAP
Prior Year
Difference in
Adjustment
Recovery
Rate
FMAP Ratea
FMAP Rate
Increase
Adjusted FMAP
Rate

A
B
C = B - A
D = 50% × C
E = A + D
FY2011b
63.61
72.47
8.86
4.43
68.04






Second and Subsequent Years

Prior Year
Disaster-
Regular
Disaster-
Difference in
Disaster-Recovery
Recovery
FMAP
Recovery
FMAP Rate
Adjustment
Adjusted FMAP
Rate
Adjusted FMAP
Increase
Rate
Rate

A
B
C = B - A
D = 25% × C
E = B + D
FY2012 61.09
68.04
6.95
1.74
69.78
FY2013 61.24
69.78
8.54
2.14
71.92

25 To meet this criteria in the first year, a state’s regular FMAP rate must have declined at least three percentage points
relative to their regular FMAP rate from the preceding year. To meet his criteria in the second and subsequent years, a
state’s regular FMAP rate must have declined at least three percentage points relative to the preceding year’s disaster-
recovery adjusted FMAP rate.
26 Federal Register. (November 30, 2011). Federal Financial Participation in State Assistance Expenditures; Federal
Matching Shares for Medicaid, the Children’s Health Insurance Program, and Aid to Needy Aged, Blind, or Disabled
Persons for October 1, 2011 Through September 30, 2013.
Vol. 76, No. 230.
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Source: Office of the Secretary, Department of Health and Human Services, “Federal Financial Participation in
State Assistance Expenditures; Federal Matching Shares for Medicaid, the Children’s Health Insurance Program,
and Aid to Needy Aged, Blind, or Disabled Persons for October 1, 2012 Through September 30, 2013,” 76
Federal Register
74061, November 30, 2011. Office of the Secretary, Department of Health and Human Services,
“Adjustments for Disaster-Recovery States to the Fourth Quarter of Fiscal Year 2011 and Fiscal Year 2012
Federal Medical Assistance Percentage (FMAP) Rates for Federal Matching Shares for Medicaid and Title IV–E
Foster Care, Adoption Assistance and Guardianship Assistance Programs,” 75 Federal Register 80501, December
22, 2010.
a. For FY2011, the preceding fiscal year’s regular FMAP rate includes the application of the “hold harmless”
provision under the ARRA temporary FMAP rate increase.
b. Initially, the disaster-recovery FMAP adjustment was to go into effective on January 1, 2011. However, due
to the extension of the ARRA FMAP adjustments, which extended the recession adjustment period to June
30, 2011 (the end of the third quarter of FY2011), no state qualified for the disaster-recovery adjustment
until the fourth quarter of FY2011.
In the fourth quarter of FY2011, Louisiana met the Stafford Act criteria (due to Hurricane Katrina
and Hurricane Gustav),27 and its regular FY2011 FMAP rate (63.61%) was at least three
percentage points less than its regular FY2010 FMAP rate plus hold harmless from the ARRA
temporary FMAP rate increase (72.47%). As shown in Table 2, Louisiana’s regular FMAP rate
was adjusted 4.43 percentage points for a total FMAP rate of 68.04% for the fourth quarter of
FY2011.
For FY2012, Louisiana meets the Stafford Act criteria (due to Hurricane Katrina and Hurricane
Gustav), and its regular FY2012 FMAP rate (61.09%) is at least three percentage points less than
its FY2011 disaster-recovery adjusted FMAP rate (68.04%). As shown in Table 2, Louisiana’s
FY2012 disaster-recovery FMAP adjustment is 3.48 percentage points for a total FMAP rate of
69.78%.
For FY2013, Louisiana will meet the Stafford Act criteria (due to Hurricane Gustav), and
Louisiana’s regular FMAP rate for FY2013 (61.24%) is more than three percentage points lower
than Louisiana’s disaster-recovery adjusted FMAP rate for FY2012 (69.78%). As shown in Table
2
, Louisiana’s FY2013 disaster-recovery FMAP adjustment will be 2.14 percentage points for a
total FMAP rate of 71.92%.
Exclusion of Certain Employer Contributions from FMAP Rate
Calculations

The Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA, P.L. 111-3)
included a provision that may adjust certain states’ regular FMAP rates starting in FY2006 (the
provision can be applied retroactively). This provision was included in CHIPRA to reflect the
annual updates of each year’s state per capita personal income data conducted by BEA to
incorporate revised and newly available population and income data. Due to the annual and
comprehensive revisions, the value of a state’s per capita personal income for a given year will
often change over time.
In 2004, BEA released revised estimates of state personal income for 2002 and 2003 that
contained upward revisions in employer contributions to privately administered pension and

27 Hurricane Katrina was declared a major disaster under the Stafford Act on August 29, 2005, and Hurricane Gustav
was declared a statewide disaster on September 2, 2008.
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welfare funds in every state.28 These revisions reflected the incorporation of more complete
data.29 The data for 2003 also reflected an increase in employer contributions for the auto
manufacturing industry.30
To accommodate these sometimes significant revisions to states’ per capita personal income data,
Section 614 of CHIPRA allows for a state’s regular FMAP rate to be adjusted if it had a
significantly disproportionate employer pension and insurance fund contribution in any calendar
year since 2003. Any identifiable employer contributions towards pensions or other employee
insurance funds are considered to be significantly disproportionate if the increase in the amount
of employer contributions accrued to residents of a state exceeds 25% of the total increase in
personal income in that state for the year involved.
The final Federal Register notice regarding the calculation for making the FMAP adjustments for
states that have an increase in personal income was published in October 2010.31 The final notice
explains that states have until the end of FY2011 to submit data on significantly disproportionate
employer contributions made between 2003 and 2008. The deadline to submit data for 2009 and
beyond will be the end of the second fiscal year following the employer’s year end annual
financial statement that includes the disproportionate share contribution. After a state submits
data, HHS will verify whether the employer contribution is significantly disproportionate and
adjust the state’s FMAP rate. However, if HHS is unable to verify the data submitted by the state,
then no FMAP adjustment will be made.
To adjust a state’s FMAP rate, HHS will recalculate the state’s regular FMAP rate disregarding
any significantly disproportionate employer pension and insurance fund contributions in the
computation of the state’s per capita income, but not in the computation for the U.S. per capita
income. This disregard will have the effect of reducing a state’s per capita personal income
relative to the national average, which in turn will increase the state’s FMAP rate. A hold
harmless provision was included in CHIPRA so that no state shall have its FMAP rate reduced as
a result of this disregard.
For states that have a decrease in personal income, Section 614(b)(3) of CHIPRA specifies that an
employer pension and insurance fund contribution shall be disregarded to the extent that the
contribution exceeds 125% of the amount of employer contribution in the previous calendar year.
The methodology to implement this special adjustment will be addressed in a future Federal
Register
notice.
The significantly disproportionate employer pension and insurance fund contribution disregard is
not expected to impact many states. In fact, Michigan is thought to be the only state with a

28 David G. Lenze, “State Personal Income: Second Quarter of 2004 and Revised Estimates for 2001-2004:I,” Survey
of Current Business 84, no. 10 (October 2004): 116-118, available at http://www.bea.gov/scb/pdf/2004/10October/
1004SPI.pdf.
29 Eugene P. Seskin and Shelly Smith, “Annual Revision of the National Income and Product Accounts: Annual
Estimates, 2001-2003 and Quarterly Estimates, 2001:1-2004:1,” Survey of Current Business 84, no. 8 (August 2004):
21 and 27, available at http://www.bea.gov/scb/pdf/2004/08August/0804niparev.pdf.
30 Personal communication with David Lenze, BEA, July 17, 2008. The increase in total earnings for that industry
(including employer contributions for employee pension and insurance funds) can be seen under “Earnings by
industry” in Table 5 of Lenze, “State Personal Income.”
31 75 Federal Register 63480 (October 15, 2010), available at http://federalregister.gov/a/2010-25977.
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significantly disproportionate employer contribution in 2003, and HHS does not think it is likely
that other states will qualify for years 2003 through 2008.32
Legislation During the 111th Congress
Temporary FMAP Rate Increase in ARRA and Six-Month Extension
During the 111th Congress, a temporary FMAP rate increase was provided to states through
ARRA and later extended by P.L. 111-226. ARRA provided states with a FMAP rate increase for
nine quarters starting October 2008, and CBO estimates federal payments to states increased by
$84 billion due to the ARRA FMAP rate increase.33 After a number of legislative attempts,34 the
House and Senate agreed to extend the temporary FMAP rate increase for six months as part of
P.L. 111-226. CBO estimated that the six month extension would provide states with an additional
$16 billion in federal Medicaid payments.35 In total, the temporary FMAP rate increase ran 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.
Details of the ARRA provision, as amended by P.L. 111-226, are as follows:
• For a “recession adjustment period” that began with the first quarter of FY2009
and ran through the third quarter of FY2011 (i.e., October 2008 through June
2011), the provision held all states harmless from any decline in their regular
FMAP rates; provided 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 percentage point increase phased down to 3.2 and then 1.2; and
provided qualifying states with an unemployment-related increase.36 It allowed
each territory to make a one-time choice between an FMAP rate increase of 6.2

32 75 Federal Register 63480 (October 15, 2010), available at http://federalregister.gov/a/2010-25977.
33 Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2011 to 2021, January 2011, p. 13,
available at http://www.cbo.gov/ftpdocs/120xx/doc12039/01-26_FY2011Outlook.pdf.
34 Three bills (H.R. 4213, H.R. 3962, and H.R. 2847) had previously contained six-month extension provisions at some
point.
35 Congressional Budget Office, Budgetary Effects of Senate Amendment 4575, August 4, 2010.
36 States were evaluated on a quarterly basis for the unemployment-related FMAP rate increase, which equaled a
percentage reduction in the state share. A state was evaluated based on its unemployment rate in the most recent three-
month period for which data were available (except for the first two and last two quarters of the temporary FMAP rate
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 were 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
could increase over time as its unemployment rate increased, but was not allowed to decrease until the second quarter
of FY2011. The percentage reduction was 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 rate of 50% would have an FMAP rate
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 rate increase of 2.58 percentage points (46.9 state share
* 0.055 reduction in state share = 2.58). The state’s total FMAP rate increase would be 8.78 points (6.2 + 2.58 = 8.78),
providing an FMAP rate of 58.78%.
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percentage points along with a 15% increase in its spending cap, or its regular
FMAP rate along with a 30% increase in its cap; all chose the latter.
• The full amount of the temporary ARRA FMAP rate increase applied only to
Medicaid, excluding disproportionate share hospital payments and most
expenditures for individuals who were eligible for Medicaid because of an
increase in a state’s income eligibility standards above what was in effect on July
1, 2008. There was an exception to the July 1, 2008, rule for certain childless
adults.37 A portion of the temporary FMAP rate increase (hold harmless plus
across-the-board) applied to Title IV-E foster care and adoption assistance.
• To receive ARRA FMAP rate increases, states were required to do the following:
certify that they would request and use the funds;38 maintain their Medicaid
“eligibility standards, methodologies, and procedures” as in effect on July 1,
2008,39comply with requirements for prompt payment of health care providers
under Medicaid (and report to the HHS Secretary on their compliance),40 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 did not pay a larger
percentage of the state’s nonfederal Medicaid expenditures than otherwise would
have been required on September 30, 2008,41 and submit a report to the Secretary

37 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 FMAP rates 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 were able to receive ARRA FMAP
rates 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 were affected by this provision.
38 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 required certification from a
state’s chief executive officer and did not include the state legislature option; see Centers for Medicare & Medicaid
Services, FMAP Extension Guidance, August 18, 2010.
39 States that restricted their “eligibility standards, procedures, or methodologies” were able to reinstate them in any
quarter to begin receiving the temporary FMAP rate increase. In addition, those states that reinstated them prior to July
1, 2009, received the increase for the first three quarters of FY2009. 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 were ultimately cleared to receive the increase. A 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. For more information about the
maintenance of effort requirements, see CRS Report R41835, Medicaid and CHIP Maintenance of Effort (MOE):
Requirements and Responses
, by Evelyne P. Baumrucker.
40 More specifically, the temporary FMAP rate increase was not 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.
41 Some states require local governments to finance part of the nonfederal (i.e., state) share of Medicaid costs. Since a
temporary FMAP rate 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 rate 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.
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regarding how the additional federal funds paid as a result of the temporary
FMAP increase were expended.42
In the Appendix to this report, Table A-2 shows the state-by-state temporary increased FMAP
rates for each quarter in FY2009, FY2010, and FY2011 provided under ARRA, and extended by
P.L. 111-226. Also, Table A-3 shows the calculations for each state’s temporary increased FMAP
rates for the third quarter of FY2011, which was the last quarter the temporary FMAP rate
increase was available to states.43
FMAP rate increases reduced the amount of state funding required to maintain a given level of
Medicaid services. For states that contemplated 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 enabled them to avoid those cuts. For others, the state savings that resulted from
an FMAP rate increase were used for a variety of purposes that were not limited to Medicaid.44
In addition to avoiding cuts to Medicaid, CBO has indicated that providing additional federal aid
to states that are facing fiscal pressures would probably stimulate the economy. However, the
estimated effects vary.45 Federal aid to states whose budgets were relatively healthy might have
provided little stimulus if it was used to build up rainy day funds (a prohibited use of the ARRA
FMAP rate increase), rather than increase spending or reduce taxes.46
FMAP Changes in the ACA
The Medicaid provisions in ACA represent the most considerable reform to Medicaid since its
enactment in 1965. The most noteworthy change begins in 2014, or sooner at state option, when
states are required to expand Medicaid eligibility to adults under age 65 with income up to 133%
of the federal poverty level (FPL) (effectively 138% FPL with the Modified Adjusted Gross
Income or MAGI 5% FPL income disregard).47

42 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 rate increases (and
territories would be denied cap increases) if they were out of compliance; however, they would not be denied the hold
harmless FMAP rate increase. In contrast, for the requirements related to maintenance of eligibility and prompt
payment, states would be denied all of the temporary FMAP rate increases (including hold harmless) if they were out of
compliance.
43 In total, the temporary increase in FMAP rates provided states and the District of Columbia with an additional $32.5
billion in FY2009 and $42.2 billion in FY2010. (Department of Health and Human Services (HHS), State and
Territories Medicaid Program Awards
, http://transparency.cit.nih.gov/RecoveryGrants/grant.cfm?grant=
Reinvestment.) Also, it is estimated that states received an additional $28 billion in federal funds through the temporary
increase in FMAP rates for FY2011. (Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years
2011 to 2021
, January 2011; Congressional Budget Office, Budgetary Effects of Senate Amendment 4575, August 4,
2010.)
44 For example, 36 states reported that they used funds from the ARRA FMAP rate 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.
45 Congressional Budget Office, letter to the Honorable Charles E. Grassley, March 2, 2009.
46 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.
47 Historically, Medicaid eligibility was generally limited to low-income children, pregnant women, parents of
dependent children, the elderly, and people with disabilities. For more information about the ACA changes to
(continued...)
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CBO estimates the Medicaid expansion will increase Medicaid enrollment by 9 million in
FY2014, which is more than a 20% increase over the Medicaid enrollment estimated for
FY2013.48 As a result, the expansion will significantly increase Medicaid expenditures, and the
federal government will cover a vast majority of the costs for individuals who are “newly
eligible” due to ACA.49
ACA contains a number of provisions that affect FMAP rates, such as “newly eligible”
beneficiary FMAP rates, “expansion state” FMAP rates, and other FMAP rate changes discussed
below.
“Newly Eligible” Beneficiary FMAP Rates. An increased FMAP rate will be provided for
“newly eligible” individuals who will gain Medicaid eligibility due to the ACA Medicaid
expansion. The “newly eligible” are defined as nonelderly, nonpregnant adults with family
income below 133% FPL 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. States will receive 100% FMAP rate for the cost of providing benchmark or
benchmark-equivalent coverage50 to “newly eligible” individuals, from 2014 through 2016. For
“newly eligible” individuals, the FMAP rate will phase down to 95% in 2017, 94% in 2018, 93%
in 2019, and 90% afterward (See Table 3).
Table 3. FMAP Rates for ACA Medicaid Expansion

2014 2015 2016 2017 2018 2019 2020+
“Newly eligible”
100% 100% 100% 95% 94% 93% 90%
adults in all states
“Expansion states”
75%-
80%-
85%-
86%-
90%-
93% 90%
92%
93%
95%
93%
93%
Source: Prepared by CRS.
Note: For the calculation of the “expansion state” FMAP rates, the lower bound is a state with a regular FMAP
rate of 50% (which is the statutory minimum), and the upper bound is a state with a regular FMAP rate of 83%
(which is the statutory maximum).

(...continued)
Medicaid, see CRS Report R41210, Medicaid and the State Children’s Health Insurance Program (CHIP) Provisions
in ACA: Summary and Timeline
, by Evelyne P. Baumrucker et al. 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.
48 Congressional Budget Office, CBO’s March 2011 Estimate of the Effects of the Insurance Coverage Provisions
Contained in the Patient Protection and Affordable Care Act (P.L. 111-148) and the Health Care and Education
Reconciliation Act of 2010 (P.L. 111-152)
, March 18, 2011.
49 Richard S. Foster, Estimated Financial Effects of the “Patient Protection and Affordable Care Act,” as Amended, the
Centers for Medicare & Medicaid Services, April 22, 2010; John Holahan and Irene Headen, Medicaid Coverage and
Spending in Health Reform: National and State-by-State Results for Adults at or Below 133% FPL, Kaiser Family
Foundation, Publication #8076, May 2010.
50 In general, benchmark benefit packages may cover fewer benefits than traditional Medicaid, but there are some
requirements, such as coverage of EPSDT services and transportation to and from medical providers, that might make
them more generous than private insurance. For more information about benchmark coverage, see CRS Report
RL33202, Medicaid: A Primer, by Elicia J. Herz.

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“Expansion State” FMAP Rates. 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 rate. As of CY2014, an increased
FMAP rate 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 (ACA’s enactment date), offered health benefits
coverage meeting certain criteria51 statewide to parents and nonpregnant childless adults at least
through 100% FPL. The formula52 used to calculate the “expansion state” FMAP rates is based on
a state’s regular FMAP rate, so the “expansion state” FMAP rates will vary from state to state
until CY2019, at which point the “newly eligible” FMAP rates and the “expansion state” FMAP
rates will both equal 90% (see Table 3).
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.”53
During CY2014 and CY2015, an FMAP rate increase of 2.2 percentage points is available for
“expansion states” that (1) the Secretary of HHS determines will not receive any FMAP rate
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 rate 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, ACA also provides—subject to various
requirements—an increased FMAP rate 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 ACA, federal CHIP allotments were provided through FY2013 and states received
reimbursement for CHIP expenditures based on the E-FMAP rate described at the beginning of
this report. Under ACA, the E-FMAP rate for CHIP expenditures in FY2016-FY2019 will be
increased by 23 percentage points, up to 100%.54 ACA also provides new federal CHIP allotments

51 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.
52 Expansion state 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+].
53 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.
54 Currently, E-FMAP rates can range from 65% to a maximum of 85%. If the ACA 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%.
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for FY2014 and FY2015. However, no federal CHIP allotments are provided during the period in
which the 23 percentage point increase in the E-FMAP rate is slated to be in effect.
Legislation During the 112th Congress
House Budget Resolution Proposed Block Grant
On April 5, 2011,55 House Budget Committee Chairman Paul Ryan released the chairman’s
mark56 of the FY2012 House budget resolution together with his report entitled The Path to
Prosperity: Restoring America’s Promise
,57 which outlines his budgetary objectives. The House
Budget Committee considered and amended the chairman’s mark on April 6, 2011, and voted to
report the budget resolution to the full House.58 H.Con.Res. 34 was introduced in the House April
11, 2011, and was accompanied by the committee report (H.Rept. 112-58).59 On April 15, 2011,
the House passed H.Con.Res. 34 by a vote of 235-193.
The committee report includes illustrative examples to achieve budget savings, such as a change
in the structure of the Medicare and Medicaid programs and the repeal of many of the provisions
in ACA. One of the proposals would restructure the Medicaid program from an individual
entitlement60 to a block grant,61 starting in FY2013.62 According to CBO’s long-term analysis of
the proposal, when compared to long-term estimates of current law, federal spending for
Medicaid would be 35% lower in FY2022 and 49% lower in FY2030.63
Proponents of the block grant model suggest that this design would make federal Medicaid
spending more predictable and provide states with stronger incentives to control the cost of their
Medicaid programs. Additionally, this design could relieve some of the cost burden to states by
removing certain federal Medicaid requirements. However, this proposal would shift the
responsibility for the growth in Medicaid spending over the federal block grant amount to states.

55 The Obama Administration released its FY2012 budget on February 14, 2011; it may be found at
http://www.whitehouse.gov/omb/budget.
56 The Chairman’s mark may be found at http://budget.house.gov/UploadedFiles/chairmansmark.pdf.
57 This report may be found at http://budget.house.gov/UploadedFiles/PathToProsperityFY2012.pdf.
58 An amendment in the nature of a substitute, that incorporates changes made during the mark-up, was made available
April 9, 2011, http://budget.house.gov/UploadedFiles/managersamendment04082010.pdf.
59 The accompanying House report, H.Rept. 112-58, may be found at http://www.gpo.gov/fdsys/pkg/CRPT-112hrpt58/
pdf/CRPT-112hrpt58.pdf.
60 Individual entitlement means that individuals who meet state eligibility requirements, which must also meet federal
minimum requirements, are entitled to Medicaid.
61 Historically, the term block grant has been used to mean programs for which the federal government provides state
governments with a fixed amount of federal funds generally for administering and providing certain services to targeted
groups of individuals.
62 For more information on these proposals, see CRS Report R41767, Overview of Health Care Changes in the FY2012
Budget Offered by House Budget Committee Chairman Ryan
.
63 CBO April 5, 2011, Letter to Rep. Paul Ryan, “Long-Term Analysis of a Budget Proposal by Chairman Ryan,”
http://cbo.gov/ftpdocs/121xx/doc12128/04-05-Ryan_Letter.pdf. CBO issued a supplementary document on April 8,
2011, in response to frequently asked questions, “Additional Information on CBO’s Long-Term Analysis of a Budget
Proposal by Chairman Ryan,” available at http://cbo.gov/ftpdocs/121xx/doc12128/
Responding_to_questions_about_estimate_for_Ryan.pdf.
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According to CBO, the magnitude of the federal Medicaid spending reductions under this
proposal would make it difficult for states to maintain their current Medicaid programs. As a
result, states would have to weigh the impact of maintaining current Medicaid service levels
against other state priorities for spending. They could choose to constrain Medicaid expenditures
by reducing provider reimbursement rates, limiting benefit packages, or restricting eligibility.
These types of programmatic changes could also impact access to and the quality of medical care
for Medicaid enrollees.
Federal Deficit Reduction
In a typical year, the federal government funds roughly 57% of the total cost for Medicaid,64 and
federal Medicaid expenditures account for almost 8% of all federal spending.65 In FY2012,
federal Medicaid payments to states are estimated to amount to $260 billion.66 Federal Medicaid
payments are anticipated to grow significantly beginning in FY2014 due to the expansion of
Medicaid eligibility provided in the ACA.67 As a percentage of gross domestic product (GDP),
federal Medicaid expenditures are expected to increase from about 1.9% of GDP in FY2011 to
2.5% of GDP in FY2021.68 As a result, controlling federal Medicaid spending has been a focus of
federal deficit reduction proposals, such as the President’s deficit reduction plan, the House
Budget Resolution (discussed above), and the National Commission on Fiscal Reform.
In September 2011, the White House released the President’s deficit reduction plan, which
included a number of Medicaid provisions that were estimated to reduce federal Medicaid
expenditures by $65.5 billion over the next 10 years.69 The Medicaid provisions include limiting
states’ ability to utilize provider taxes70 in financing the state share of Medicaid expenditures;
replacing the current federal Medicaid financing structure with a blended FMAP rate;71 limiting
Medicaid reimbursement of durable medical equipment; strengthening third-party liability for
Medicaid beneficiary claims; re-basing Medicaid disproportion share hospital (DSH) payments;
amending modified adjusted gross income to include Social Security;72 and reducing waste, fraud,
and abuse.

64 Office of the Actuary, 2010 Actuarial Report on the Financial Outlook for Medicaid, Centers for Medicare and
Medicaid Services, December 2010.
65 Office of Management and Budget, Historical Tables: Budget of the U.S. Government, Fiscal Year 2012.
66 Congressional Budget Office, Spending and Enrollment Detail for CBO’s March 2011 Baseline: Medicaid, March
18, 2011.
67 Historically, Medicaid eligibility was generally limited to low-income children, pregnant women, parents of
dependent children, the elderly, and people with disabilities; however, ACA requires Medicaid coverage for individuals
under the age of 65 with income up to 133% of the federal poverty level. For more information about the ACA changes
to Medicaid, CRS Report R41210, Medicaid and the State Children’s Health Insurance Program (CHIP) Provisions in
ACA: Summary and Timeline
, by Evelyne P. Baumrucker et al.
68 Congressional Budget Office, The Budget and Economic Outlook, FY2011 to FY2021, January 2011.
69 Office of Management and Budget, Living Within Our Means and Investing in the Future: The President’s Plan for
Economic Growth and Deficit Reduction
, September 2011.
70 For more information about Medicaid provider taxes, see CRS Report RS22843, Medicaid Provider Taxes, by Alison
Mitchell.
71 Details regarding the White House’s proposed blended FMAP rate are not available, but essentially the blended rate
would replace the current patchwork of federal matching rates with a single federal matching rate for all Medicaid
expenditures. Since the blended rate was proposed in the context of federal deficit actions, it is expected that the
proposed blended rate would provide budgetary savings to the federal government.
72 This provision became law on November 21, 2011 (P.L. 112-56). Specifically, the law changed the definition of
(continued...)
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The National Commission on Fiscal Reform final report included savings from Medicaid totaling
$58 billion over 10 years. The savings came from eliminating states’ ability to fund Medicaid
through provider taxes, covering dual-eligibles under managed care arrangements, and giving
states additional fiscal responsibility for administrative costs.73
To the extent federal Medicaid expenditures are reduced, in most cases, states would need to
increase the state share of Medicaid to maintain their current Medicaid programs. This will be
difficult for states that are already struggling to fund their current share of Medicaid expenditures,
due to the adverse impacts of the recession on state budgets. Faced with this situation, states
would have to weigh the impact of maintaining current Medicaid service levels against other state
spending priorities.

(...continued)
income to include non-taxable Social Security in the definition of modified adjusted gross income.
73 National Commission on Fiscal Reform,The Moment of Truth: Report of the National Commission on Fiscal
Responsibility and Reform
, December 1, 2010, http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/
documents/TheMomentofTruth12_1_2010.pdf.
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Appendix. Regular and Temporary Increased FMAP
Rates for Medicaid, by State

This appendix includes three tables showing the state-by-state regular and temporary increase
FMAP rates for various fiscal years. Table A-1 shows regular FY2005-FY2013 FMAP rates
calculated according to the formula described in the text of the report (see “How FMAP Rates
Are Calculated”). Table A-2 and Table A-3 show the temporary FMAP rate increase provided
under ARRA, and extended by P.L. 111-226, for FY2009, FY2010, and the first three quarters of
FY2011. The temporary FMAP rate increased ended June 30, 2011, so the third quarter of
FY2011 was the last quarter the temporary FMAP rate increase was available to states.
Table A-1 shows regular FMAP rates for FY2013 which range from 50% (14 states) to 73%
(Mississippi). From FY2012 to FY2013, regular FMAP rates will decrease for 24 states,74
increase for 12 states,75 and remain the same for 14 states76 and the District of Columbia. All of
the 14 states for which the FMAP rates do not change have the statutory minimum FMAP rate of
50%, and the FMAP rate for the District of Columbia is statutorily set at 70%.
The quarterly temporary FMAP rate increases for FY2009, FY2010, and FY2011 are shown in
Table A-2. In FY2009, the lowest FMAP rate any state or the District of Columbia received in
any quarter was 56.20% and the highest FMAP rate was 84.24%.77 Then, in FY2010, the lowest
FMAP rate any state or the District of Columbia received in any quarter was 61.12% and the
highest FMAP rate was 84.86%.78 In total, the temporary increase in FMAP rates provided states
and the District of Columbia with an additional $32.5 billion in FY2009 and $42.2 billion in
FY2010.79
In FY2011, the temporary FMAP rate increase phased down each quarter from the original ARRA
levels in the first quarter to regular FMAP rates in the fourth quarter of FY2011 (the temporary
FMAP rate increase ended on June 30, 2011). Mississippi received the highest FMAP rate in all
four quarters of FY2011, with 84.86% in the first quarter, 82.03% in the second quarter, 80.15%
in the third quarter, and 74.73% in the fourth quarter. Eleven states80 received the lowest FMAP

74 The 24 states with regular FMAP rates decreasing from FY2012 to FY2013 are Alabama, Arizona, Arkansas,
Georgia, Iowa, Kansas, Kentucky, Maine, Mississippi, Missouri, Montana, Nebraska, New Mexico, North Dakota,
Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Vermont, West Virginia, and Wisconsin.
75 The 12 states with regular FMAP rates increasing from FY2012 to FY2013 are Delaware, Florida, Hawaii, Idaho,
Indiana, Louisiana, Michigan, Nevada, North Carolina, Oklahoma, South Carolina, and Texas.
76 The 14 states with regular FMAP rates remaining the same from FY2012 to FY2013 are Alaska, California,
Colorado, Connecticut, Illinois, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New York,
Virginia, Washington, and Wyoming.
77 In FY2009, Wyoming received an ARRA FMAP rate of 56.20% for the first three quarters, and New Hampshire
received an ARRA FMAP rate of 56.20% for the first two quarters. Mississippi received an ARRA FMAP rate of
84.24% for the last two quarters of FY2009.
78 In FY2010, Alaska received an ARRA FMAP rate of 61.12% for the first quarter, and Mississippi received an ARRA
FMAP rate of 84.86% for all four quarters.
79 Department of Health and Human Services (HHS), State and Territories Medicaid Program Awards,
http://www.hhs.gov/recovery/statefundsfmap-text.html.
80 The 11 states that had the lowest FMAP rate for all four quarters in FY2011 were California, Colorado, Connecticut,
Maryland, Massachusetts, Minnesota, New Jersey, New Hampshire, New York, Virginia, and Wyoming.
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rates for all four quarters of FY2011, with 61.59% in the first quarter, 58.77% in the second
quarter, 56.88% in the third quarter, and 50.00% in the fourth quarter.81
As shown in Table A-3, in FY2011, 27 states82 are held harmless from any decline in their regular
FMAP rates. Also shown in the table, for the third quarter of FY2011, 43 states83 and the District
of Columbia were in the highest tier for the unemployment adjustment. North Dakota was the
only state that did not receive an unemployment adjustment because its unemployment rate did
not exceed its lowest unemployment rate (for any three month period since January 1, 2006) by at
least 1.5 percentage points.
Table A-1. Regular FMAP Rates by State, FY2005-FY2013
Change
FY12 to
State FY05
FY06
FY07
FY08
FY09a FY10a FY11a FY12 FY13 FY13
Alabama 70.83
69.51
68.85
67.62
67.98
68.01
68.54
68.62
68.53
-0.09
Alaskab 57.58
57.58
57.58
52.48
50.53
51.43
50.00
50.00
50.00
0.00
Arizona 67.45
66.98
66.47
66.20
65.77
65.75
65.85
67.30
65.68
-1.62
Arkansas 74.75
73.77
73.37
72.94
72.81
72.78
71.37
70.71
70.17
-0.54
California 50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
0.00
Colorado 50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
0.00
Connecticut 50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
0.00
Delaware 50.38
50.09
50.00
50.00
50.00
50.21
53.15
54.17
55.67
1.50
District of
70.00 70.00 70.00 70.00 70.00 70.00 70.00 70.00 70.00 0.00
Columbiac
Florida 58.90
58.89
58.76
56.83
55.40
54.98
55.45
56.04
58.08
2.04
Georgia 60.44
60.60
61.97
63.10
64.49
65.10
65.33
66.16
65.56
-0.60
Hawai 58.47
58.81
57.55
56.50
55.11
54.24
51.79
50.48
51.86
1.38
Idaho 70.62
69.91
70.36
69.87
69.77
69.40
68.85
70.23
71.00
0.77
Illinois 50.00
50.00
50.00
50.00
50.32
50.17
50.20
50.00
50.00
0.00
Indiana 62.78
62.98
62.61
62.69
64.26
65.93
66.52
66.96
67.16
0.20
Iowa 63.55
63.61
61.98
61.73
62.62
63.51
62.63
60.71
59.59
-1.12
Kansas 61.01
60.41
60.25
59.43
60.08
60.38
59.05
56.91
56.51
-0.40

81 Washington and Alaska also received a 50% FMAP rate in the fourth quarter of FY2011.
82 In FY2011, the following 27 states were held harmless from any decline in their regular FMAP rates: Alaska,
Arizona, Arkansas, Florida, Hawaii, Idaho, Illinois, Iowa, Kansas, Louisiana, Maine, Mississippi, Missouri, Montana,
Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Utah,
Vermont, Washington, West Virginia, and Wisconsin.
83 For the third quarter of FY2011, the following 43 states were in the highest tier (see footnote 38) of the
unemployment adjustment: Alabama, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii,
Idaho, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi,
Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma,
Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West
Virginia, Wisconsin, and Wyoming.
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Change
FY12 to
State FY05
FY06
FY07
FY08
FY09a FY10a FY11a FY12 FY13 FY13
Kentucky 69.60
69.26
69.58
69.78
70.13
70.96
71.49
71.18
70.55
-0.63
Louisiana 71.04
69.79
69.69
72.47
71.31
67.61
63.61d 61.09d 61.24d 0.15
Maine 64.89
62.90
63.27
63.31
64.41
64.99
63.80
63.27
62.57
-0.70
Maryland 50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
0.00
Massachusetts 50.00
50.00
50.00
50.00 50.00 50.00 50.00
50.00
50.00 0.00
Michigan 56.71
56.59
56.38
58.10
60.27
63.19
65.79
66.14
66.39
0.25
Minnesota 50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
0.00
Mississippi 77.08
76.00
75.89
76.29
75.84
75.67
74.73
74.18
73.43
-0.75
Missouri 61.15
61.93
61.60
62.42
63.19
64.51
63.29
63.45
61.37
-2.08
Montana 71.90
70.54
69.11
68.53
68.04
67.42
66.81
66.11
66.00
-0.11
Nebraska 59.64
59.68
57.93
58.02
59.54
60.56
58.44
56.64
55.76
-0.88
Nevada 55.90
54.76
53.93
52.64
50.00
50.16
51.61
56.20
59.74
3.54
New Hampshire
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
0.00
New Jersey
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
0.00
New Mexico
74.30
71.15
71.93
71.04
70.88
71.35
69.78
69.36
69.07
-0.29
New York
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
0.00
North Carolina
63.63
63.49
64.52
64.05
64.60
65.13
64.71
65.28
65.51
0.23
North Dakota
67.49
65.85
64.72
63.75
63.15
63.01
60.35
55.40
52.27
-3.13
Ohio 59.68
59.88
59.66
60.79
62.14
63.42
63.69
64.15
63.58
-0.57
Oklahoma 70.18
67.91
68.14
67.10
65.90
64.43
64.94
63.88
64.00
0.12
Oregon 61.12
61.57
61.07
60.86
62.45
62.74
62.85
62.91
62.44
-0.47
Pennsylvania 53.84
55.05
54.39
54.08
54.52
54.81
55.64
55.07
54.28
-0.79
Rhode Island
55.38
54.45
52.35
52.51
52.59
52.63
52.97
52.12
51.26
-0.86
South Carolina
69.89
69.32
69.54
69.79
70.07
70.32
70.04
70.24
70.43
0.19
South Dakota
66.03
65.07
62.92
60.03
62.55
62.72
61.25
59.13
56.19
-2.94
Tennessee 64.81
63.99
63.65
63.71
64.28
65.57
65.85
66.36
66.13
-0.23
Texas
60.87 60.66 60.78 60.56e 59.44 58.73 60.56 58.22 59.30 1.08
Utah 72.14
70.76
70.14
71.63
70.71
71.68
71.13
70.99
69.61
-1.38
Vermont 60.11
58.49
58.93
59.03
59.45
58.73
58.71
57.58
56.04
-1.54
Virginia 50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
0.00
Washington 50.00
50.00
50.12
51.52
50.94
50.12
50.00
50.00
50.00
0.00
West Virginia
74.65
72.99
72.82
74.25
73.73
74.04
73.24
72.62
72.04
-0.58
Wisconsin 58.32
57.65
57.47
57.62
59.38
60.21
60.16
60.53
59.74
-0.79
Wyoming 57.90
54.23
52.91
50.00
50.00
50.00
50.00
50.00
50.00
0.00
Number with
19f 28 27 20 17 14 22 21 24

decrease from
previous year
Congressional Research Service
28

.
Medicaid: The Federal Medical Assistance Percentage (FMAP)

Source: Department of Health and Human Services (HHS). 75 Federal Register 69082 (November 10, 2010),
available at http://federalregister.gov/a/2010-28319.
Notes: Reflects FMAP rates calculated using the regular FMAP formula, with exceptions noted below.
a. FY2009-FY2011 FMAP rates do not reflect temporary increases provided under the American Recovery
and Reinvestment Act of 2009 (P.L. 111-5) as amended by P.L. 111-226. In total, states received the
temporary FMAP increase ran for 11 quarters, from the first quarter of FY2009 through the third quarter of
FY2011 (i.e., October 2008 through June 2011).
b. Alaska’s Medicaid FMAP rate 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 rate of 50.16% and FY2007 FMAP rate of 51.07%.
c. Section 4725(b) of the Balanced Budget Act of 1997 amended section 1905(b) to provide that the FMAP
rate for the District of Columbia shall be set at 70% for purposes of titles XIX and XXI and for capitation
payments and DSH allotments under those titles. For other purposes, the percentage for the District of
Columbia is 50%, unless otherwise specified by law.
d. Louisiana’s FMAP rate was higher than the regular FMAP rate for this year due to the disaster-recovery
adjustment. Louisiana’s adjusted FMAP rate was 68.04% for the fourth quarter of FY2011, 69.78% for
FY2012, and 71.92% for FY2013. The disaster-recovery FMAP adjustment is discussed in the text.
e. 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%.
f.
Compared to regular FMAP rates that applied in the last quarter of FY2004.

Congressional Research Service
29

.

Table A-2. Temporary FMAP Rate Increase Under ARRA and Extended by P.L. 111-226
FY2009 1st Quarter to FY2011 3rd Quarter
FY2009
FY2009
FY2009
FY2009
FY2010
FY2010
FY2010
FY2010
FY2011
FY2011
FY2011
State
1st quarter 2nd quarter 3rd quarter 4th quarter 1st quarter 2nd quarter 3rd quarter 4th quarter 1st quarter 2nd quarter 3rd quarter
Alabama
76.64 76.64 77.51 77.51 77.53 77.53 77.53 77.53 78.00 75.17 73.29
Alaska
58.68 58.68 61.12 61.12 61.12 62.46 62.46 62.46 62.46 59.58 57.67
Arizona
75.01 75.01 75.93 75.93 75.93 75.93 75.93 75.93 75.93 73.10 71.22
Arkansas
79.14 79.14 80.46 80.46 80.46 81.18 81.18 81.18 81.18 78.30 76.39
California
61.59 61.59 61.59 61.59 61.59 61.59 61.59 61.59 61.59 58.77 56.88
Colorado
58.78 58.78 61.59 61.59 61.59 61.59 61.59 61.59 61.59 58.77 56.88
Connecticut 60.19 60.19 60.19 61.59 61.59 61.59 61.59 61.59 61.59 58.77 56.88
Delaware
60.19 60.19 61.59 61.59 61.78 61.78 61.78 61.78 64.38 61.55 59.67
Dis.
of
Columbia
77.68 77.68 79.29 79.29 79.29 79.29 79.29 79.29 79.29 76.47 74.58
Florida
67.64 67.64 67.64 67.64 67.64 67.64 67.64 67.64 67.64 64.81 62.93
Georgia
73.44 73.44 74.42 74.42 74.96 74.96 74.96 74.96 75.16 72.33 70.45
Hawai
66.13 66.13 67.35 67.35 67.35 67.35 67.35 67.35 67.35 64.52 62.63
Idaho
78.37 78.37 79.18 79.18 79.18 79.18 79.18 79.18 79.18 76.35 74.47
Illinois
60.48 60.48 61.88 61.88 61.88 61.88 61.88 61.88 61.88 59.05 57.16
Indiana
73.23 73.23 74.21 74.21 75.69 75.69 75.69 75.69 76.21 73.39 71.50
Iowa
68.82 68.82 68.82 70.71 72.55 72.55 72.55 72.55 72.55 69.68 67.76
Kansas
66.28 66.28 68.31 69.41 69.68 69.68 69.68 69.68 69.68 66.81 64.90
Kentucky
77.80 77.80 79.41 79.41 80.14 80.14 80.14 80.14 80.61 77.78 75.90
Louisiana
80.01 80.01 80.01 80.75 81.48 81.48 81.48 81.48 81.48 78.65 76.77
Maine
72.40 72.40 74.35 74.35 74.86 74.86 74.86 74.86 74.86 72.03 70.15
Maryland
58.78 58.78 60.19 61.59 61.59 61.59 61.59 61.59 61.59 58.77 56.88
Massachusetts 58.78 58.78 60.19 61.59 61.59 61.59 61.59 61.59 61.59 58.77 56.88
CRS-30

.

FY2009
FY2009
FY2009
FY2009
FY2010
FY2010
FY2010
FY2010
FY2011
FY2011
FY2011
State
1st quarter 2nd quarter 3rd quarter 4th quarter 1st quarter 2nd quarter 3rd quarter 4th quarter 1st quarter 2nd quarter 3rd quarter
Michigan
69.58 69.58 70.68 70.68 73.27 73.27 73.27 73.27 75.57 72.74 70.86
Minnesota
60.19 60.19 61.59 61.59 61.59 61.59 61.59 61.59 61.59 58.77 56.88
Mississippi
83.62 83.62 84.24 84.24 84.86 84.86 84.86 84.86 84.86 82.03 80.15
Missouri
71.24 71.24 73.27 73.27 74.43 74.43 74.43 74.43 74.43 71.61 69.72
Montana
76.29 76.29 77.14 77.14 77.99 77.99 77.99 77.99 77.99 75.17 73.28
Nebraska
65.74 65.74 67.79 67.79 68.76 68.76 68.76 68.76 68.76 65.84 63.90
Nevada
63.93 63.93 63.93 63.93 63.93 63.93 63.93 63.93 63.93 61.10 59.22
New
Hampshire
56.20 56.20 58.78 60.19 61.59 61.59 61.59 61.59 61.59 58.77 56.88
New
Jersey 58.78 58.78 61.59 61.59 61.59 61.59 61.59 61.59 61.59 58.77 56.88
New
Mexico 77.24 77.24 78.66 79.44 80.49 80.49 80.49 80.49 80.49 77.66 75.78
New
York
58.78 58.78 60.19 61.59 61.59 61.59 61.59 61.59 61.59 58.77 56.88
North
Carolina
73.55 73.55 74.51 74.51 74.98 74.98 74.98 74.98 74.98 72.16 70.27
North
Dakota 69.95 69.95 69.95 69.95 69.95 69.95 69.95 69.95 69.95 66.95 64.95
Ohio
70.25 70.25 72.34 72.34 73.47 73.47 73.47 73.47 73.71 70.88 69.00
Oklahoma
74.94 74.94 74.94 75.83 75.83 76.73 76.73 76.73 76.73 73.90 72.01
Oregon
71.58 71.58 72.61 72.61 72.87 72.87 72.87 72.87 72.97 70.14 68.25
Pennsylvania 63.05 63.05 64.32 65.59 65.85 65.85 65.85 65.85 66.58 63.76 61.87
Rhode
Island 63.89 63.89 63.89 63.89 63.92 63.92 63.92 63.92 64.22 61.39 59.51
South
Carolina 78.55 78.55 79.36 79.36 79.58 79.58 79.58 79.58 79.58 76.75 74.86
South
Dakota 68.75 68.75 70.64 70.64 70.80 70.80 70.80 70.80 70.80 68.95 67.04
Tennessee
73.25 73.25 74.23 74.23 75.37 75.37 75.37 75.37 75.62 72.79 70.91
Texas
68.76 68.76 68.76 69.85 70.94 70.94 70.94 70.94 70.94 68.11 66.23
Utah
77.83 77.83 79.98 79.98 80.78 80.78 80.78 80.78 80.78 77.95 76.07
Vermont
67.71 67.71 69.96 69.96 69.96 69.96 69.96 69.96 69.96 67.13 65.24
Virginia
58.78 58.78 61.59 61.59 61.59 61.59 61.59 61.59 61.59 58.77 56.88
CRS-31

.

FY2009
FY2009
FY2009
FY2009
FY2010
FY2010
FY2010
FY2010
FY2011
FY2011
FY2011
State
1st quarter 2nd quarter 3rd quarter 4th quarter 1st quarter 2nd quarter 3rd quarter 4th quarter 1st quarter 2nd quarter 3rd quarter
Washington 60.22 60.22 62.94 62.94 62.94 62.94 62.94 62.94 62.94 60.11 58.23
West
Virginia 80.45 80.45 81.70 83.05 83.05 83.05 83.05 83.05 83.05 80.23 78.34
Wisconsin
65.58 65.58 68.77 69.89 70.63 70.63 70.63 70.63 70.63 67.80 65.92
Wyoming
56.20 56.20 56.20 58.78 61.59 61.59 61.59 61.59 61.59 58.77 56.88
Source: 74 Federal Register 18235, (April 21, 2009), available at http://federalregister.gov/a/E9-9095; 74 Federal Register 64697, (December 8, 2009), available at
http://federalregister.gov/a/E9-29248; 75 Federal Register 66763 (October 29, 2010) available at http://federalregister.gov/a/2010-27412; 75 Federal Register 22807 (April 30,
2010) available at http://federalregister.gov/a/2010-10055; 75 Federal Register 52530 (August 26, 2010) available at http://federalregister.gov/a/2010-21235; 75 FR 66763,
(October 9, 2010), available at http://federalregister.gov/a/2010-27412; 76 Federal Register 5811 (February 2, 2011), available at http://federalregister.gov/a/2011-2283; 76 FR
32204, (June 3, 2011), available at http://federalregister.gov/a/2011-13783.
CRS-32

.

Table A-3. Calculation of Temporary FMAP Rate Increase by State, 3rd Quarter FY2011
Hold
harmless:
ARRA
highest
ARRA
FMAP
of FY08-
Hold
3-month
FMAP
Regular
Rate
FY10
harmless
average
Lowest 3-
Rate
FMAP
2nd
regular
plus 1.2
unemployment month average
3rd
Rate
quarter
FMAP
percentage
ending March
unemployment Unemployment Unemployment Unemployment quarter
State
FY11
FY11
Rates
pointsa
2011
since Jan. 2006
difference
tier
adjustment
FY11


A
B=A+6.2
C D E=C-D F
G=(100-A-0.6)F%b H=B+G
Alabama 68.54
75.17
68.54
69.74
9.3 3.3 6.0 11.5 3.55
73.29
Alaska 50.00
59.58
52.48
53.68
7.5
5.9
1.6 8.5
3.99
57.67
Arizona 65.85
73.10
66.20
67.40
9.6 3.7 5.9 11.5 3.82
71.22
Arkansas 71.37
78.30
72.94
74.14
7.8 4.8 3.0 8.5 2.25
76.39
California 50.00
58.77
50.00
51.20
12.1 4.8 7.3 11.5 5.68
56.88
Colorado 50.00
58.77
50.00
51.20
9.2 3.6 5.6 11.5 5.68
56.88
Connecticut
50.00
58.77
50.00
51.20
9.0 4.3 4.7 11.5 5.68
56.88
Delaware 53.15
61.55
53.15
54.35
8.4 3.4 5.0 11.5 5.32
59.67
District of Columbia
50.00
76.47
70.00
71.20
9.5
5.4
4.1
11.5
3.38
74.58
Florida 55.45
64.81
56.83
58.03
11.5 3.3 8.2 11.5 4.90
62.93
Georgia 65.33
72.33
65.33
66.53
10.1 4.4 5.7 11.5 3.92
70.45
Hawai 51.79
64.52
56.50
57.70
6.3 2.3 4.0 11.5 4.93
62.63
Idaho
68.85
76.35
69.87
71.07
9.7 2.7 7.0 11.5 3.40
74.47
Illinois 50.20
59.05
50.32
51.52
8.9 4.4 4.5 11.5 5.64
57.16
Indiana 66.52
73.39
66.52
67.72
8.8 4.5 4.3 11.5 3.78
71.50
Iowa 62.63
69.68
63.51
64.71
6.1
3.6
2.5
8.5
3.05
67.76
Kansas 59.05
66.81
60.38
61.58
6.8
3.9
2.9 8.5 3.32
64.90
Kentucky 71.49
77.78
71.49
72.69
10.3 5.5 4.8 11.5 3.21
75.90
Louisiana 63.61
78.65
72.47
73.67
7.9 3.7 4.2 11.5 3.10
76.77
Maine 63.80
72.03
64.99
66.19
7.5 4.5 3.0 11.5 3.96
70.15
CRS-33

.

Hold
harmless:
ARRA
highest
ARRA
FMAP
of FY08-
Hold
3-month
FMAP
Regular
Rate
FY10
harmless
average
Lowest 3-
Rate
FMAP
2nd
regular
plus 1.2
unemployment month average
3rd
Rate
quarter
FMAP
percentage
ending March
unemployment Unemployment Unemployment Unemployment quarter
State
FY11
FY11
Rates
pointsa
2011
since Jan. 2006
difference
tier
adjustment
FY11


A
B=A+6.2
C D E=C-D F
G=(100-A-0.6)F%b H=B+G
Maryland 50.00
58.77
50.00
51.20
7.1 3.5 3.6 11.5 5.68
56.88
Massachusetts
50.00
58.77
50.00
51.20
8.2 4.4 3.8 11.5 5.68
56.88
Michigan 65.79
72.74
65.79
66.99
10.5 6.7 3.8 11.5 3.87
70.86
Minnesota
50.00
58.77
50.00
51.20
6.7 3.9 2.8 11.5 5.68
56.88
Mississippi
74.73
82.03
76.29
77.49
10.2 6.1 4.1 11.5 2.66
80.15
Missouri 63.29
71.61
64.51
65.71
9.3 4.7 4.6 11.5 4.01
69.72
Montana 66.81
75.17
68.53
69.73
7.4 3.2 4.2 11.5 3.55
73.28
Nebraska 58.44
65.84
60.56
61.76
4.3 2.8 1.5 5.5 2.14
63.90
Nevada 51.61
61.10
52.64
53.84
13.7 4.2 9.5 11.5 5.38
59.22
New
Hampshire
50.00
58.77
50.00
51.20
5.4 3.4 2.0 11.5 5.68
56.88
New
Jersey
50.00
58.77
50.00
51.20
9.2 4.1 5.1 11.5 5.68
56.88
New
Mexico
69.78
77.66
71.35
72.55
8.5 3.4 5.1 11.5 3.23
75.78
New
York
50.00
58.77
50.00
51.20
8.5 4.3 4.2 11.5 5.68
56.88
North
Carolina
64.71
72.16
65.13
66.33
9.8 4.5 5.3 11.5 3.94
70.27
North Dakota
60.35
66.95
63.75
64.95
3.7
2.9
0.8
0.0
0.00
64.95
Ohio
63.69
70.88
63.69
64.89
9.1 5.3 3.8 11.5 4.11
69.00
Oklahoma
64.94
73.90
67.10
68.30
6.4 3.2 3.2 11.5 3.71
72.01
Oregon 62.85
70.14
62.85
64.05
10.2 5.0 5.2 11.5 4.20
68.25
Pennsylvania
55.64
63.76
55.64
56.84
8.0 4.2 3.8 11.5 5.03
61.87
Rhode
Island
52.97
61.39
52.97
54.17
11.2 4.9 6.3 11.5 5.34
59.51
South
Carolina
70.04
76.75
70.32
71.52
10.2 5.5 4.7 11.5 3.34
74.86
CRS-34

.

Hold
harmless:
ARRA
highest
ARRA
FMAP
of FY08-
Hold
3-month
FMAP
Regular
Rate
FY10
harmless
average
Lowest 3-
Rate
FMAP
2nd
regular
plus 1.2
unemployment month average
3rd
Rate
quarter
FMAP
percentage
ending March
unemployment Unemployment Unemployment Unemployment quarter
State
FY11
FY11
Rates
pointsa
2011
since Jan. 2006
difference
tier
adjustment
FY11


A
B=A+6.2
C D E=C-D F
G=(100-A-0.6)F%b H=B+G
South Dakota
61.25
68.95
62.72
63.92
4.8
2.7
2.1
8.5
3.12
67.04
Tennessee
65.85
72.79
65.85
67.05
9.5 4.6 4.9 11.5 3.86
70.91
Texas 60.56
68.11
60.56
61.76
8.2 4.3 3.9 11.5 4.47
66.23
Utah
71.13
77.95
71.68
72.88
7.6 2.5 5.1 11.5 3.19
76.07
Vermont 58.71
67.13
59.45
60.65
5.6 3.6 2.0 11.5 4.59
65.24
Virginia 50.00
58.77
50.00
51.20
6.4 2.8 3.6 11.5 5.68
56.88
Washington
50.00
60.11
51.52
52.72
9.2 4.4 4.8 11.5 5.51
58.23
West
Virginia
73.24
80.23
74.25
75.45
9.4 3.9 5.5 11.5 2.89
78.34
Wisconsin
60.16
67.80
60.21
61.41
7.4 4.3 3.1 11.5 4.51
65.92
Wyoming 50.00
58.77
50.00
51.20
6.2 2.7 3.5 11.5 5.68
56.88
Source: 74 Federal Register 62315 (November 27, 2009), available at http://federalregister.gov/a/E9-28438; 76 FR 32204, (June 3, 2011), available at
http://federalregister.gov/a/2011-13783; Bureau of Labor Statistics, Regional and State Employment and Unemployment - April 2011, May 20, 2011, available at
http://www.bls.gov/news.release/archives/laus_05202011.pdf; Bureau of Labor Statistics, Regional and State Employment and Unemployment - March 2011, April 19, 2011,
available at http://www.bls.gov/news.release/archives/laus_04192011.pdf.
Notes: The territories are not shown. Each territory could chose between an FMAP rate increase of 6.2 percentage points along with a 15% increase in its spending cap, or
its regular FMAP rate along with a 30% increase in its spending cap; all chose the latter. The increased spending caps resulted in about $75 million more federal Medicaid
funding to the territories in FY2011, mostly to Puerto Rico.
a. The across-the-board increase was 6.2 percentage points from the first quarter of FY2009 through the first quarter of FY2011. In the second quarter of FY2011, the
across-the-board increase was reduced to 3.2 percentage points, and the across-the-board increase dropped to 1.2 percentage points in the third quarter of FY2011.
b. This calculation was G=(100-A-3.2)*F% from the first quarter of FY2009 through the first quarter of FY2011. With the phased down of the temporary FMAP rate
increase, the calculation changed to G=(100-A-1.6)*F% for the second quarter of FY2011 and to G=(100-A-0.6)*F% for the third quarter of FY2011.

CRS-35

.
Medicaid: The Federal Medical Assistance Percentage (FMAP)


Author Contact Information

Alison Mitchell
Evelyne P. Baumrucker
Analyst in Health Care Financing
Analyst in Health Care Financing
amitchell@crs.loc.gov, 7-0152
ebaumrucker@crs.loc.gov, 7-8913

Acknowledgments
The authors 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
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