Medicaid Federal Funding: Cuts to Federal Share (“FMAP”) Hurt Families, Providers and State Economies

States and the federal government jointly cover the costs of health care and services provided to the almost 80 million people covered by Medicaid. This federal-state funding partnership is the largest source of federal funding to states, providing a lifeline of health coverage to low-income Americans, and serving as the financial backbone of the health care system and state and local economies.

While congressional proposals to change funding formulas might sound benign or bureaucratic, they represent a cataclysmic cut to Medicaid that would have dramatic health and economic repercussions: millions of Americans losing coverage, states forced to cut programs or raise taxes, hospitals and health care providers forced to cut services, and major economic impacts on local communities.

Proposals that weaken Medicaid including through federal funding formula changes would make massive cuts to state budgets and services, health systems, and coverage for millions of Americans — jeopardizing family finances and local economies alike.