Trapped in America's Safety Net

One reason for such wide variation in eligibility and benefits is that Medicaid is a very expensive program to run, and poorer states can afford less. States split the cost with the federal government; the feds provide more funding to the poorer states, as measured by per capita income. A poor state receives $ 2.85 in federal funds for every dollar it spends of its own funds, while richer states only receive $ 1.00.30 But getting the federal match still means spending a state dollar, which poor states are less likely to have. 31 The inverse matching formula is meant to incentivize states to enroll more of their low-income groups in Medicaid. But in reality, poorer states often can’t afford to be more generous, even with the greater federal match. The result is that even for health insurance, the experience of the poor varies dramatically across states and across time with states’ fluctuating fiscal circumstances.