The National Association of Medicaid Directors has published a primer on how Medicaid is financed at the state and federal levels.
The background paper describes the federal Medical Assistance percentage – FMAP, the rate at which the federal government provides matching funds for state Medicaid expenditures – how money flows from the federal government to the states, how Medicaid costs are budgeted at the state level, and how states raise their share of their Medicaid costs.
It also outlines factors that affect Medicaid spending, such as enrollment, covered benefits, utilization, the cost of services, administrative costs, and the growing demand for Medicaid-covered long-term services and supports.
Learn more about how Medicaid is financed from the National Association of Medicaid Directors background paper “Why Did They Do It That Way? Medicaid Financing.”