Medicaid is funded by which levels of government?

• A. Federal government only
• B. State governments only
• C. Federal and state governments
• D. Private insurers

Answer: (C)

Medicaid is a joint program funded and administered by both the federal and state governments. The federal government contributes funds to states and sets broad requirements and standards, while states share in the cost and run the program, tailoring certain benefits to their populations. The federal share is provided through a matching mechanism (FMAP) and varies by state, which means the exact mix of funding comes from both levels, not just one. Private insurers do not fund Medicaid, though private organizations may administer or deliver care under the program.