Medicaid is a countercyclical program: enrollment and spending grow when there is a downturn in the economic cycle, and states face an increasing demand for Medicaid but have less revenue to pay for it. In response, Congress has acted several times to increase the federal medical assistance percentage (FMAP) for Medicaid spending.
This presentation followed up on prior presentations describing policy choices and objectives for an automatic FMAP mechanism. It examined a Government Accountability Office (GAO) prototype countercyclical financing model in light of three objectives previously identified by the Commission and suggests options for recommendations that the Commission could make for a countercyclical financing mechanism.