Who pays for the vast majority of Medicaid expansion?

• A. Federal government
• B. State governments
• C. Private insurers
• D. Local governments

Answer: (A)

The funding for Medicaid expansion is provided mainly by the federal government through the Federal Medical Assistance Percentage (FMAP), which covers the vast majority of the costs for the expanded population. The design of the expansion intentionally shifts most financial responsibility to federal dollars, reducing the burden on states. In current practice, the federal share runs around 90% of expansion costs (and was 100% in the early years after the ACA). States contribute a much smaller portion, about 10%, for the expansion. Private insurers and local governments don’t pay the bulk of these costs, and the state’s role is limited to its smaller share.