Medicaid: The Federal Medical Assistance Percentage (FMAP)

April Grady
Specialist in Health Care Financing

Chris L. Peterson
Acting Section Research Manager

Medicaid is a health insurance program jointly funded by the federal government and the states. Generally, eligibility for Medicaid is limited to low-income children, pregnant women, parents of dependent children, the elderly, and people with disabilities. The federal government's share of a state's expenditures for most Medicaid services is called the federal medical assistance percentage (FMAP). The remainder is referred to as the nonfederal share, or state share. 


Generally determined annually, the FMAP is designed so that the federal government pays a larger portion of Medicaid costs in states with lower per capita income relative to the national average (and vice versa for states with higher per capita incomes). For FY2010, the regular FMAPs—that is, excluding the impact of the temporary FMAP increase included in the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5)—range from 50.00% to 75.67%. 


In the State Children's Health Insurance Program (CHIP), expenditures are generally reimbursed at the enhanced FMAP (E-FMAP). This is calculated by reducing the state share under the regular FMAP by 30%. 


In the 111th Congress, ARRA included a temporary FMAP increase for nine quarters, subject to certain requirements. The Administration estimated that the provision will increase federal payments to states by more than $90 billion. For the first quarter of FY2010, the FMAPs reflecting the ARRA increase ranged from 61.12% (Alaska) to 84.86% (Mississippi). (The ARRA FMAP increase does not affect the CHIP E-FMAP.) The ARRA FMAPs end December 31, 2010. 


On March 10, 2010, the Senate passed H.R. 4213, which included a provision to extend the ARRA FMAPs by two quarters, through June 30, 2011. Although the House Rules Committee had reported an amendment (H.Rept. 111-497 accompanying H.Res. 1403) containing a similar provision on May 26, the House passed a version of H.R. 4213 that excluded the ARRA FMAP extension on May 28. 


The new health reform law enacted March 23, 2010 (P.L. 111-148, H.R. 3590, the Patient Protection and Affordable Care Act, or PPACA, as amended by P.L. 111-152), did not extend the ARRA FMAPs. PPACA requires that for states to get any Medicaid matching funds, they cannot make Medicaid or CHIP "eligibility standards, methodologies, or procedures" more restrictive than those in effect on March 23, 2010, PPACA's enactment date. In 2014, the law requires states with Medicaid programs to expand coverage to some currently ineligible low-income parents and childless adults. For these newly eligible individuals, states will have a 100% FMAP for three years and then slightly reduced rates well above regular FMAPs.


Date of Report: June 1, 2010
Number of Pages: 22
Order Number: RL32950
Price: $29.95

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