The U.S. Government Accountability Office (GAO) recently released the comprehensive questionnaire data from a survey conducted on states’ methods for Medicaid payment financing from fiscal 2008 through fiscal 2012 (using the state fiscal year calendar). States finance the nonfederal share of Medicaid expenditures largely through state general funds, but also with other sources such as taxes on health care providers and local government funds. According to the report GAO published last year based on the data, states in recent years have increased their reliance on funds from health care providers and local governments to cover the non-federal share of Medicaid expenditures. Nationally, the share of non-federal Medicaid costs financed by these two sources reached 25.9 percent, or roughly $46 billion, in fiscal 2012. Meanwhile, state general funds made up 62.9 percent, state intra-agency funds 6.6 percent, and other fund sources (such as tobacco settlement funds) made up 4.6 percent of the total non-federal share of Medicaid payments in fiscal 2012. The report also notes that the non-federal share financed with funds from providers and local governments varied substantially among states.
by Sarah Curry
Director of Fiscal Policy Studies