GAO: Congress should increase federal Medicaid matching rates

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Congress should consider temporarily increasing Medicaid's Federal Medical Assistance Percentage (FMAP) formula to help beleaguered state budgets, a new report suggests.

According to a Government Accountability Office report, states' abilities to fund Medicaid were hampered by increased Medicaid enrollment and declines in states' revenues that typically occur during a national downturn.

The report outlines a prototype formula for a temporary FMAP increase. According to the report, “once a threshold number of states — 26 in GAO's prototype formula — show a sustained decrease in their employment to-population (EPOP) ratio, temporary increases to states' FMAPs would be triggered automatically.”

The amount of assistance each state gets would be calculated based on changes to the state's unemployment rate and total wages/salaries, according to the report.

Click here to read highlights of the GAO report. Click here to read the full report.