Medicaid is funded by which levels of government?

• A. Federal only
• B. State only
• C. Local government
• D. Both state and federal

Answer: (D)

Medicaid is funded as a joint effort between the federal and state governments. The federal government provides a matching share of the costs for each state through the FMAP—the Federal Medical Assistance Percentage—and states cover the remaining costs with their own funds. The exact percentage from the federal government varies by state, and can be influenced by population and program rules, but the essential point is that both levels of government contribute. Local governments don’t fund Medicaid directly, though they may be involved in administration or service delivery at the local level.