Medicaid receives a three-to-one federal match on money the state budgets for Mississippi's health insurance program which serves about 700,000 Mississippians.
As part of President Bush's tax relief program, that match rate is increasing a few percentage points for 14 months, creating a $113 million windfall.
The money is not only covering the fiscal 2004 shortfall, but $13 million the program lacked last fiscal year, which ended June 30.
Rica Lewis-Payton, Medicaid's executive director, said the windfall is a big help for now, but Medicaid could face the same problem in 2005.
Medicaid's shortfalls have been a recurring source of disagreement between the governor and lawmakers.
While Gov. Ronnie Musgrove, who oversees Medicaid, has said the program was underfunded, some lawmakers contended it was spending too much.
State Senator Willie Simmons, an Appropriations Committee member, says massive shortfalls will not resurface if the division continues with cost-saving measures recently enacted.