Medicaid, a program that helps people with low income pay their medical bills, is funded by both the federal government and individual state governments. Each state has its own Medicaid system that must follow federal guidelines to receive proper grants and funding for the state.
The Federal Medical Assistance Percentage, which is a set percentage of program expenditures, is paid to the states by the federal government and varies based on the states' per capita income. FMAP ranges from 50 percent in the wealthy states to 75 percent in states that have lower per capita income. The FMAP state average is 57 percent.