Summary

Changes the federal Medicaid matching formula so the enhanced federal match that some states received does not drop all at once. Instead, the bill phases the match down gradually from 2027 through 2034 and returns the federal match to the normal (pre-enhanced) rate in 2035. It also creates special timing rules for states that did or did not expand Medicaid and removes a previously enacted temporary FMAP increase.

Key Points

• Phases down the enhanced Medicaid FMAP gradually from 2027 through 2034.
• Returns federal Medicaid matching rates to the normal pre-enhanced level in 2035 and later.
• Establishes different timing/calculation rules for states that did or did not expand Medicaid.
• Removes a temporary FMAP increase that had been added elsewhere in Medicaid law.
• Shifts increasing shares of Medicaid costs back to states over the phasedown period.
• Requires states to update budgeting and fiscal planning to accommodate year-by-year FMAP changes.
• May lower federal Medicaid spending relative to the enhanced-match baseline during the phase-down.
• Is a targeted, one-topic statutory change rather than a broad or omnibus package.

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