GAO Presents Framework for Medicaid Funding Formula Revisions
The GAO has developed a prototype formula for a temporary increased Federal Medical Assistance Percentage (FMAP) designed to target variable state Medicaid needs and provide automatic, timely, and temporary assistance in response to national economic downturns. The recommendations stem from a mandate in the American Recovery and Reinvestment Act of 2009 that GAO provide recommendations for modifying the FMAP formula to make it more responsive to state Medicaid program needs during future economic downturns. Under the formula, temporary enhanced assistance would be triggered when a threshold number of states (26 in the prototype formula) have a sustained decrease in their employment-to-population ratio. The amount of targeted assistance would be based on increases in unemployment and reductions in total wages and salaries.
