Medicaid Spending

Per capita health care spending and Medicaid spending per enrollee vary widely by state. According to 2009 data, Alaska, which spent the most on Medicaid, spent more than twice that of California, which spent the least. State spending for Medicaid continues to grow, consuming one third of the Missouri state budget, but just 7 percent of the Wyoming state budget in 2010.  Regional and state data are provided in this brief on per capita health spending, Medicaid spending, and Medicaid enrollment. 

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National Analysis:

Trends in Health Care Spending
  • Health care spending varies widely by state. In 2009, per capita spending for all health care services was the highest in Massachusetts at $9,278, and the lowest in Utah at $5,031. U.S. per capita spending for the same year was $6,815.
  • While per capita spending for health care continues to increase, the annual growth rate has slowed. The average annual growth rate was 6.6 percent from 1998 to 2004, but fell to 4.7 percent between 2004 and 2009.
  • States with the highest per capita health care spending share a number of economic and demographic trends. They tend to have higher personal income per capita. They also tend to have proportionately higher numbers of women of child-bearing age and seniors, both groups that are higher users of health care services.1
Trends in Medicaid Spending
  • State Medicaid spending per enrollee is more than twice as much in the highest spending states than the lowest spending states. Alaska spent $11,569 per Medicaid enrollee in 2009, while California spent only $4,569. The national average for 2009 Medicaid spending per enrollee was $6,826.
  • In addition to Alaska, six other states—Connecticut, New Hampshire, New Jersey, New York, North Dakota and Rhode Island—spent more than $10,000 per Medicaid enrollee in 2009. Only Georgia and California spent less than $5,000 per Medicaid enrollee in 2009. Another nine states—Alabama, Arizona, Arkansas, Florida, Hawaii, Illinois, Michigan, Mississippi and Tennessee—spent less than $6,000 per Medicaid enrollee in the same year.
  • Like overall health care spending, the average annual increase in Medicaid spending has moderated in recent years, from 3.3 percent from 1998 to 2004, to 2.3 percent from 2004 to 2009.
  • The average annual growth in Medicaid spending lags behind the growth in all health care spending, suggesting that states have successfully implemented public policies to control Medicaid spending.
Medicaid as a Percent of State Budgets
  • Medicaid expenditures are a growing share of budgets in most states. In December 2011, the National Association of State Budget Officers reported that the Medicaid program grew from 21.9 percent of all state expenditures—including all state and federal funds—in 2009 to 22.3 percent in 2010, and was expected to grow to 23.6 percent in 2011.2
  • As a share of state general funds only, Medicaid in 2011 is estimated to be 17.4 percent. It is still far behind primary and secondary education, which has a 35 percent share of state general funds across all states. 
  • State budget shares for Medicaid expenditures—all funds, state and federal—in 2010 varied from a high of 34.4 percent in Missouri to a low of 7.3 percent in Wyoming.
Medicaid Enrollment
  • More than 50 million Americans were enrolled in the Children's Health Insurance Program (CHIP) and Medicaid programs in June 2010. This means 16.3 percent of Americans depend on this federal-state program for health care. 
  • While the Medicaid program includes some federal mandatory eligibility categories, states have many policy options to expand eligibility. States also differ in the intensity of their outreach activities.
  • The percent of state populations enrolled in CHIP and Medicaid in June 2010 ranged from 24.4 percent in New York to 9.4 percent in Utah.

 

Regional Analysis:

  • State health spending per capita in 2009 in the Midwestern region clustered around the U.S. average of $6,815. North Dakota spent the most per capita at $7,749, while Michigan spent the least at $6,618.
  • Spending per Medicaid enrollee varied broadly in the Midwest, from $10,111 in North Dakota to $5,703 in Michigan.
  • All Midwestern states except Indiana, Illinois and Michigan spent more per Medicaid enrollee than the U.S. average in 2009.
  • Total spending for Medicaid in the Midwestern region in 2010 was the lowest of the four regions at nearly $68 billion.
  • Medicaid enrollment in the Midwest ranged from a high of 19.1 percent in Illinois to 9.5 percent in North Dakota in 2010. For the region as a whole, 16.3 percent were enrolled in Medicaid or CHIP in June 2010.
  • Spending on Medicaid in 2010 ranged from 25.1 percent of state expenditures in Minnesota to 13.7 percent in North Dakota.

  • Per capita health care spending in every state in the Eastern region, ranging from $9,278 in Massachusetts to $7,492 in Maryland, exceeded the U.S. average per capita spending of $6,815 in 2009.
  • All Eastern region states except Delaware spent more per Medicaid enrollee in 2009 than the national average.
  • State spending per Medicaid enrollee varied from $10,933 in Connecticut to $6,679 in Delaware. The national average per enrollee was $6,826 in 2009.
  • Total spending in the Eastern region for Medicaid in 2010 was nearly $97 billion, higher than all but the Southern region, which contains significantly more states.
  • Proportional enrollment in Medicaid is the highest in the Eastern region; 17.8 percent of the region’s population was enrolled in Medicaid or CHIP in June 2010.
  • State enrollment in Medicaid ranged from 24.4 percent in New York to 9.7 percent in New Jersey.
  • Maine spent twice as much of its budget on Medicaid—29.6 percent of all funds in 2010—as Delaware, 14.4 percent.

  • Health care spending per capita in the South tends to be low. Per capita health care spending in 2009 for all but three Southern states—Florida, Missouri and West Virginia—was below the national average. 
  • Spending per Medicaid enrollee varied broadly in the South, from $8,398 in Missouri to $4,835 in Georgia for 2009.
  • Ten Southern states spent more than the national average of $6,826 per Medicaid enrollee, and five states spent less than the national average.
  • Total spending for Medicaid in the Southern region for 2010 was the highest of the four regions at more than $121 billion, 33.6 percent of all state Medicaid expenditures in 2010.
  • Enrollment in Medicaid and CHIP in the South, 15.1 percent for the region, is the lowest of the four regions.
  • State enrollment percentages ranged from 21.5 percent in Louisiana to 9.8 percent in Virginia in June 2010.
  • State spending on Medicaid ranged from 34.4 percent of 2010 expenditures in Missouri to 12.6 percent in West Virginia.

  • Health care spending per capita in Western states ranged from $9,128 in Alaska to $5,031 in Utah in 2009.
  • Spending per Medicaid enrollee in 2009 varied broadly in the West, from $11,569 in Alaska to less than half as much, $4,569, in California.
  • Spending per Medicaid enrollee in Alaska was the highest in the nation in 2009 and California was the lowest in the nation.
  • In 2009, six states in the West spent less per Medicaid enrollee than the national average of $6,826 and seven spent more.
  • Total spending for Medicaid in the West was $75 billion in 2010, but nearly 52 percent of the total was in California alone.  
  • Enrollment in Medicaid varies by state in the West, from a high of 22.2 percent in New Mexico to 9.4 percent in Utah. Utah had the lowest percentage of its population enrolled in Medicaid or CHIP in June 2010.
  • Spending on Medicaid in 2010 ranged from 27.8 percent of state expenditures in Arizona to 7.3 percent in Wyoming. Even though California spent the least per Medicaid enrollee, it spent 18.9 percent of expenditures—state and federal—on Medicaid in 2010.