Greetings—

As Congress considers cuts to Medicaid funding, one proposal is to remove the 50 percent floor on the federal medical assistance percentage (FMAP), which determines federal contributions to state Medicaid programs, and to reduce the 70 percent FMAP for the District of Columbia to 50 percent.

In a new report, Urban Institute researchers analyze the potential impacts of this proposal, which would affect DC and the 10 states that currently have matching rates at the FMAP floor of 50 percent. The researchers also examine the impact of eliminating the 90 percent enhanced federal support for adults made eligible for optional Medicaid expansion under the Affordable Care Act. They found:  

Eliminating the FMAP floor and reducing the DC FMAP would lower federal funding for Medicaid in the 10 states and DC by $468 billion over 10 years.
In the absence of increased spending by states, these changes would result in cuts of $50.1 billion for children, $67.1 billion for nondisabled and nonexpansion adults, $189.5 billion for disabled people, and $161.1 billion for the elderly.  
To maintain their current Medicaid programs in the face of these FMAP reductions, the 10 states and DC would have to increase their spending, with increases ranging from 4.1 percent in Maryland to 51.3 percent in Massachusetts and 63.2 percent in DC.  
If the enhanced match for the Medicaid expansion were also to be eliminated, this would lower federal funding for Medicaid in DC and the 10 states by $835 billion over 10 years. 
To offset the loss in federal contributions if both the FMAP floor and the enhanced expansion match were eliminated, state spending would have to increase by between 21 percent in Maryland and by 66 and 83 percent in Connecticut and DC.

Read the report to learn more. For additional Urban analyses on how possible changes to Medicaid could affect access to health care and health care spending, explore the webpage.

If you’d like to be connected to the research team, please reply to this email.

Thanks,