Federal Funds Information for States just published projections for the federal fiscal year 2008 matching rate for Medicaid. They are projecting that Ohio’s rate will climb to a 60.79 percent. According to the good folks at Ohio Health Plans (e.g. the state Medicaid department) the last time Ohio’s rate was over 60% was in 1996.

The increased rate will have the effect of Ohio picking up an estimated $159 million in additional federal Medicaid revenue during the state fiscal year 2008-2009 budget – only two other states, Michigan and Louisiana are expected to see larger dollar gains as a result of the shift in what are known as Federal Medical Assistance Percentage (FMAP) rates.

So what’s the bad news? The rates are based on a three-year average of state per capita personal income compared to the national average, so that means Ohio’s state per capita income is lagging the national average and therein lives the bad news.

Of course if Ohio cuts its Medicaid budget (not just reducing the rate of growth) it would see a corresponding decrease in FMAP payments.