Medicaid is the largest piece of the federal funds pie in State Expenditures

In fiscal 2014, Medicaid comprised 51 percent of all federal funds to states, according to NASBO’s State Expenditure Report, released in November 2014. This marked the first time in the 27-year history of the State Expenditure Report that Medicaid represented over half of all federal funds to states.
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Medicaid as a percentage of all federal funds to states had remained relatively consistent until fiscal 2014. Every year between fiscal 1995 and fiscal 2013, Medicaid represented between 42 to 47 percent of all federal funds to states. In fiscal 2013, Medicaid was 46.6 percent of all federal funds to states. The increase in fiscal 2014 resulted from federal funds for Medicaid growing 17.8 percent. Conversely, state funds (general funds and other state funds combined) for Medicaid only grew 2.7 percent in fiscal 2014. The rate of growth in federal funds exceeded state funds since costs for those newly eligible for coverage in states implementing the Medicaid expansion under the Affordable Care Act (ACA) are fully federally funded in calendar years 2014, 2015, and 2016. Federal funding will then phase down and will be 90 percent by 2020 and beyond.
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Sarah Curry

Sarah Curry is Director of Fiscal Policy Studies at the John Locke Foundation.

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