$15 Billion in Medicaid Relief Headed To States

Federal Medical Assistance Percentage (FMAP)

Funding by State

Medicaid is a federal/state partnership program that provides health benefits to certain low-income Americans, including children, their parents, pregnant women, the elderly and people with disabilities. Over the course of the year, some 51 million people who would otherwise not have access to regular health care rely on Medicaid.

Because Medicaid is a partnership, states and the federal government each have a role in designing and paying for each state's program. While states have some flexibility in determining what benefits they provide, who will be eligible and how much they will pay health care providers, they must work within federal guidelines. In turn, the federal government pays a portion of each state's Medicaid costs. These matching dollars are referred to as Federal Medical Assistance Percentage (FMAP) payments.

The amount of FMAP a state gets is based upon the state's relative wealth, with lower per capita income states receiving higher FMAPs. Medicaid funding percentages can range from a minimum of 50 percent of costs, to as high as 83 percent. (For 2009, the highest state matching rate is nearly 76 percent, for Mississippi). FMAP funding is adjusted incrementally each year based on economic changes in the states, but Congress can increase funding across the board at any time.

As part of the American Recovery and Reinvestment Act of 2009 (ARRA), Congress acted to temporarily increase FMAP payments for all states during the current recession. Each state will get a general 6.2 percent increase in its FMAP, and certain states with relatively high unemployment rates may get additional increases based on quarterly unemployment statistics. Funding increases will be in effect from FY 2009 until the first quarter of FY 2011.

This money—which could total $15 billion for the first part of 2009 alone—was made available to states by President Obama on February 25. This funding could help millions more Americans get Medicaid benefits.

"This plan will also help ensure that you don't need to make cuts to essential services Americans rely on now more than ever," the President said to national governors.

Read the White House news release and state by state chart.

Medicaid Grant Award Process

Recovery Act Implementation Plans

• Temporary Increase in Medicaid Federal Medical Assistance Percentage (FMAP)
• Medicaid FMAP Implementation

Frequent Questions about Medicaid and the Recovery Act

The Medicaid Frequently Asked Questions (FAQs) is one of a series designed to provide guidance on the implementation of the American Recovery and Reinvestment Act of 2009 (ARRA), Public Law 111-5. The FAQs address questions that have been submitted to the Centers for Medicare and Medicaid ARRA mailbox, CMSOARRAQuestions@cms.hhs.gov. Future FAQs letters are currently in clearance and will be issued in the coming weeks and months.