A Bit of Clarity on Who Gets What Matching Rate – Say Ahhh! A Children’s Health Policy Blog

Medicaid will continue to be a cornerstone of coverage under health reform, with an additional 16 million people joining the program. A key question that many are asking (especially state officials facing tight budgets) is how the cost of this Medicaid expansion will be financed.

Let’s start with the big picture – overall, CBO estimates the federal government will finance the vast majority of the increase in Medicaid coverage attributable to health reform. In fact, over the next ten years, approximately 96% of the cost will be picked up by the feds.

But as many know, Medicaid financing is not completely straightforward. Matching rates vary by state and program (CHIP vs. Medicaid), and under health reform they’ll also vary by population (newly-eligible vs. already-eligible). In the hopes of providing a bit of clarity, CCF and the Kaiser Commission on Medicaid and the Uninsured put together a brief on the issue.

For those of you who want the Cliff Notes version, here you go:

•    Regular Medicaid Matching Rate: The regular Medicaid matching rate will continue for those “already-eligible” individuals (people who qualify for Medicaid under the rules in effect on December 1, 2009).  

•    CHIP Matching Rate: The CHIP matching rate will remain available to states through the end of fiscal year 2015, and then assuming Congress extends funding for CHIP past this date, it will increase by an additional 23 percentage points.  

•    “Newly-Eligible” Matching Rate: The newly-eligible matching rate is set at 100% in 2014-2016, 95% in 2017, 94% in 2018, 93% in 2019, and 90% in 2020 and beyond. (This is the match rate designed to assure that the federal government finances much of the cost of the Medicaid expansion). It will be available for adults with income up to 133% of the FPL who are not eligible for Medicaid under the rules that a state had in place on December 1, 2009.

•    “Transition” Matching Rate:  The transition-matching rate is designed to provide some additional federal help to expansion states (states that expanded coverage for adults to at least 100% of the FPL). These states can receive a phased-in increase in their federal matching rate for adults without children starting January 1, 2014, so that by 2019 it will equal the enhanced matching rate available for newly-eligible adults.

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