Brief Redistribution of Federal Funding Across States Due to the Financing of Medicaid and CHIP
John Holahan, Jennifer M. Haley
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A new analysis of federal government spending by the Urban Institute, with funding from the Robert Wood Johnson Foundation, finds that Medicaid and CHIP largely transfers funding from higher-income states to lower-income states. This redistribution mostly occurs because of the higher Medicaid/CHIP federal matching rates low-income states receive, but it also owes to the smaller tax contributions such states make to the federal treasury. Many higher-income states receive high shares of total federal Medicaid/CHIP spending (and have more generous programs than average), but their residents and businesses contribute even more to federal revenues. At the same time, many lower-income states receive low shares of national Medicaid/CHIP spending (and have less generous programs per low-income resident), but their residents and business make even smaller contributions to the treasury.

Research Areas Health and health care Taxes and budgets
Tags Health insurance Federal health care reform Health equity Medicaid and the Children’s Health Insurance Program  State Children's Health Insurance Program State and local tax issues Federal budget and economy Federal tax issues and reform proposals
Policy Centers Health Policy Center