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HEHS-96-168R 1 (1996-06-10)

handle is hein.gao/gaobacpvl0001 and id is 1 raw text is: j 0/ United States General Accounting Office Washington, D.C. 20548 Health, Education, and Human Services Division B-272252 June 10, 1996 The Honorable Michael Bilirakis House of Representatives Dear Mr. Bilirakis: This letter responds to your request for comments on an analysis entitled, Florida's Fair Share. That analysis questions the appropriateness of the Medicaid funding formula now contained in H.R. 3507, noting that Florida's projected allocations for fiscal years 1996 through 2002 are less than those projected for Pennsylvania and Ohio, even though Florida has more people and a larger proportion of elderly individuals than either state.' Our review of the formula in H.R. 3507 indicates that in each year the new formula would cause the distribution of federal Medicaid funding to become progressively more closely aligned with states' poverty populations and to reflect the proportions of the populations who are elderly. Under current law, federal funding of state Medicaid programs is not based on the size of state populations. Rather, the program is an open-ended matching program that provides more generous matching rates for low-income states. Consequently, the more a state spends on benefits for eligible recipients and the lower its per capita income, the more it receives in federal dollars. For example, Florida spends less than Pennsylvania and receives less in matching federal funds (see table 1). In contrast, Ohio spends less yet receives more in federal matching because its lower per capita income results in a higher federal matching percentage (61 percent compared with Florida's 56 percent). 'The analysis also points out that on a proportionate basis, North Carolina also receives more. That is, Florida has twice the population of North Carolina but would not receive twice the funding under the proposal. GAO/HEHS-96-168R Analysis of Florida's Fair Share