Medicaid: Improved Federal Oversight of State Financing Schemes Is Needed

February 2004 Medicaid: Improved Federal Oversight of State Financing Schemes Is Needed In searching for ways to generate additional revenues, many states have turned to certain creative financing schemes for Medicaid, the federal-state partnership that finances health care for an estimated 53 million low-income people. Although each state must pay a share of Medicaid expenditures, the federal government pays the larger share on average, 57 percent calculated according to a matching formula defined in statute. Over the years, some states have taken advantage of the flexibility built into the Medicaid program by devising financing schemes that inappropriately boost . . .