The decennial tally doesn’t just count the number of people in each state – it also seeks to measure their age, their income and whether they are covered by health insurance – all factors in determining how much in funding each state will receive.  An undercount can mean a state receives fewer federal dollars and so must either curtail services or find the needed funds elsewhere.

The percentage of persons living in poverty is used to calculate the matching fund rate by which  Washington and the states share the cost of Medicaid.  And under one proposal, the percent of state residents that lack health insurance could be used to determine the disproportionate share payments that states receive.

States can also use Census data to set the scope of their assistance programs.  A state with a smaller percentage of its population living in poverty can afford to offer Medicaid assistance to persons with higher incomes.  A state with a large percentage living in poverty, like Texas, has to set lower income limits due to the greater number of persons the program must serve.    

A report released today by the Brookings Institution’s Metropolitan Policy Program showed that rural and low-income urban areas were the biggest per-capita recipients of Federal funds in 2008.  Medicaid accounted for 58% of all grants-in-aid paid to states.

The study revealed that states – including the District of Columbia - with the most generous Medicaid coverage were amongst the top recipients of federal dollars on a per capita basis.  Two states in the top tier, Louisiana and Mississippi – received extra federal funds to assist in recovery from Hurricane Katrina.

The other states in the top ten had large populations of poor persons with the exception of Alaska, which has a small population yet received substantial transportation funds. 

The top ten in per capita receipt of federal funds:

1. The District of Columbia. Large poor population, generous Medicaid program, high Medicaid match rate. 
2. Vermont. Generous Medicaid and Children’s Health Insurance (CHIP) program. 
3. Alaska. Small population.
4. New York. Large poor population, generous Medicaid program.
5. Massachusetts. Generous Medicaid and CHIP programs.  
6. Louisiana. Poor population.  Received extra funding for post-Katrina recovery, including enhanced Medicaid funding.  
7. Tennessee. Large poor population, high Medicaid match rate. 
8. Maine. Generous Medicaid and CHIP programs, high eligibility limits. 
9. New Mexico. Like Tennessee, a large poor population and high Medicaid match rate.
10. Mississippi. Large poor population and post-Katrina recovery funds.