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Social Programs

Washington Pays More to Cover Medicaid for Healthy Adults than the Vulnerable

Social Programs Policy Rapid Response BlogMay 7, 2025 By Matthew Dickerson
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Medicaid was created to benefit the disabled, pregnant women, children, and low-income seniors. The costs of care for beneficiaries are split between states and the federal government. The federal share of the spending is based on a formula called the Federal Medical Assistance Percentage (FMAP). The average FMAP for this traditional Medicare population is about 57%. Obamacare expanded Medicaid eligibility to able-bodied, working age adults. To encourage states to expand Medicaid, the FMAP for the expansion population was set at 90%. So, for every $1 of state spending on pregnant women and disabled children, the federal government contributes about $1.33. Meanwhile, it pays $9 for every $1 of state spending on work-capable adults under Obamacare.  Medicaid Expansion Discriminates Against Vulnurable The disparity in the FMAP between the traditional vulnerable population Medicaid was intended to serve and the expansion population made eligible by Obamacare has extremely perverse incentives. States and providers are encouraged to push services for able-bodied adults, who bring in higher federal reimbursements, rather than the people who need help the most. Almost 700,000 people with disabilities are on Medicaid waitlists for home and community care. The elevated federal reimbursement for work-capable adults on welfare is indefensible. Lawmakers should fix this problem by phasing the 90%-10% split back down to the normal rates.

Author

Matthew D. Dickerson

Matthew D. Dickerson

Director of Budget Policy

Matthew D. Dickerson is Director of Budget Policy at the Economic Policy Innovation Center (EPIC). Dickerson is recognized as an expert on fiscal policy issues, including the budget, appropriations, and entitlement reform. His articles have been featured in the Wall Street Journal , the Miami Herald , National Review , the Sacramento Bee , the Washington Times , the Baltimore Sun , The Hill , the Washington Examiner , and other outlets. Prior to joining EPIC, Dickerson served as Senior Policy Advisor on the staff of the House Budget Committee, where he helped lead development of the fiscal year 2024 budget resolution. He has a dozen years of experience on Capitol Hill, including as a senior staffer with the Republican Study Committee (RSC), the caucus of conservatives in the House of Representatives. Under four different RSC chairmen, Dickerson held senior level roles including Policy Director and Senior Policy Staff. Additionally, he served as Legislative Director and other policy positions for the late Congressman C.W. Bill Young (R-FL), a former Chairman of the powerful House Appropriations Committee. During his tenure at The Heritage Foundation, Dickerson was Director of the Grover M. Hermann Center for the Federal Budget. In this capacity, he oversaw a team of budget analysts and economists researching diverse subjects including spending, entitlements, budget process, tax, labor, pensions, and infrastructure issues. He has also been a Policy Manager at Americans for Prosperity, where he supervised a team of fellows and analysts covering a variety of federal and state policy issues. Dickerson is a graduate of the College of William and Mary in Virginia and holds a Bachelor of Arts in Government and History.

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