The Government Accountability Office (GAO), a nonpartisan
congressional watchdog group, released a report this month arguing for a new
Medicaid matching rate. The GAO says this rate, currently calculated using the Federal
Medical Assistance Percentage (FMAP), is unfair because it doesn’t take into
account factors other than per capita income.
According to a CQ article, the FAMP is based
on each state’s per capita income in comparison to the national per capita
income. Currently, states on average get a federal matching rate of 57 percent,
but the share varies widely among states. The report says that a funding
allocation mechanism should take into account the demand for services in each
state, geographic cost differences among states, and individual state resources,
in order to be equitable from the
perspective of beneficiaries and allow states to provide a comparable level of
services to each person in need.
Specifically, the GAO suggests creating new measures based
on those three criteria. To assess the demand for Medicaid services, the
government could use federal surveys such as the American Community Survey and
the Current Population Survey to target the population in need of services. The
program could account for geographic health care cost differences by looking at
the provider costs from the Occupational Employment Statistics survey. Finally,
state resources can be taken into account by using data in the Total Taxable
Resources measure.
The report is non-binding, and any changes to the program
would have to come via congressional legislation. That could pose issues with
lawmakers from states that would lose matching funds with the new criteria.
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