Options for improving the FMAP formula: Making Medicaid Work for the 21st Century Issue Brief

This November 2004 issue brief addresses the federal medical assistance percentage (FMAP). The reimbursement percent is calculated according to a formula established in the Medicaid statute & based on the per capita income in each state. The fact that the FMAP is based on historical data is sometimes of concern to states. Additionally, the current system makes no specific provision for changes in the economy, leaving states confronted with increased costs when they can least afford them.