Medicaid: Matching Formula's Performance and Potential Modifications
(Testimony, 07/27/95, GAO/T-HEHS-95-226).

When the Medicaid program was established in 1965, a matching formula
was developed to narrow differences likely to arise among Medicaid
programs in wealthier and poorer states.  By giving poorer state a
higher federal match, it was believed that disparities would be reduced
across states in (1) population groups and services covered in each
state program and (2) the tax burden imposed by the financing of
Medicaid relative to the size of the state's financial resources.  GAO
testified that the matching formula, with its reliance on per capita
income as a measure of state wealth, has not significantly reduced wide
differences in states' Medicaid programs or the tax burdens to support
them. Large disparities persist in coverage of population groups and
types of services as well as in the burdens that state taxpayers bear in
financing state programs.  Modifying the formula could enhance the
ability of federal payments to narrow program disparities.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-HEHS-95-226
     TITLE:  Medicaid: Matching Formula's Performance and Potential 
             Modifications
      DATE:  07/27/95
   SUBJECT:  Medicaid programs
             State-administered programs
             Disadvantaged persons
             Health care cost control
             Federal/state relations
             Federal aid to states
             Cost sharing (finance)
             Health care services
             Formula grants
             Taxpayers

             
------------------------------------------------------------------------

We regret that electronic text of GAO Testimony is not available at 
this time. 

See the GAO FAQ - Section 2.0 for printed copy ordering information.
The FAQ is automatically retrieved with all WAIS search results or 
can be obtained by sending e-mail to: [email protected]