Increase in Federal Match Associated With Significant Gains in Coverage for Children Through Medicaid and CHIP

As the number of children living in poverty has increased steadily over the past decade, Medicaid and the Children’s Health Insurance Program (CHIP) have enrolled millions of additional youths. Federal and state governments jointly finance both programs, with the federal portion determined by the Federal Medical Assistance Percentage, commonly known as the “federal match.” The federal government has used intermittent increases in the federal match as a way to provide fiscal relief to states during economic downturns. The most recent broad increase ended in June 2011, but the precise impact on Medicaid and CHIP enrollment for children is not known. No previous study has evaluated the association of the federal match with children’s enrollment in state Medicaid or CHIP programs in the context of other state factors.

To shed light on the degree to which public coverage for children varies with differences in the federal match, these researchers examined publicly available data from all 50 states from 1999 to 2009. They found that a 10-percentage point increase in the federal match was associated with a 1.9 percent increase in Medicaid and CHIP enrollment, equivalent to approximately 500,000 children. This association persisted when adjusted for multiple state-level factors, including the proportion of children living in poverty.

This analysis underscores the central role of the federal match in supporting expansion of Medicaid and CHIP coverage for children.