Funding for Medicaid comes from both federal and state governments. State participation in Medicaid is optional, but all 50 states have opted to join. In some states, localities are required to contribute funds.
States are reimbursed by the federal government for a portion (the federal share) of a state’s Medicaid program costs. Each state’s federal share is determined by a formula set in law that depends on a state’s per capita personal income. A state receives a bigger portion if personal income is lower than the national average; the portion is less if personal income is higher than the national average. There is no upper limit or cap on federal reimbursements. The rate paid by the federal government can range from 50 percent to 83 percent of costs, depending on the state. The federal government, on average, pays 57 percent of the cost of the program.
RELATED FAQs
Who Are Dual Eligibles?
What Is the Difference Between Medicare and Medicaid?
Are There Examples in the States of Novel Approaches to Managing Dual Eligibles?
What Does the Affordable Care Act Do With Regards to Dual Eligibles?
Who Is the Primary Payer for Dual Eligibiles?
