Medicaid Formula Transition

Pursuant to a congressional request, GAO provided information on the Medicaid formula transition under H.R. 3057. GAO noted that: (1) the change in the Medicaid formula would depend on the growth in future authorized federal funding; (2) larger authorizations would allow state allotments to become proportional to state needs; (3) eight states would receive federal allotments proportional to their need by fiscal year (FY) 2002; (4) federal Medicaid funding for all states would be proportional to state need by FY 2037; (5) each state's federal allocation would increase, depending upon the difference between the federal spending ratio and the target amount; and (6) constraints would be placed on these allotments, to guarantee equal distribution of federal matching funds.