Financing

The federal government matches state spending on Medicaid on an open-ended basis. The federal matching rate can range from 50% to 76%, depending on a state’s per capita income. States with higher per capita incomes have a lower federal matching rate. See federal matching rates.

States can also receive a performance bonus for implementing enrollment and renewal strategies and increasing Medicaid enrollment for children. The size of the payment can vary from 15% to 62.5% of the average cost to a state of covering a child, depending upon the extent to which a state's enrollment exceeds target levels.