Combined federal and state expenditures for Medicaid accounted for about 18.5 percent of U.S. health care spending in calendar year (CY) 2022, the most recent year for which historical data are available. In comparison, Medicare accounted for about 21.2 percent and private insurance accounted for about 29.9 percent of U.S. health care spending (MACStats).
For certain types of care, Medicaid accounts for a larger portion of total U.S. spending than any other type of payer. National Health Expenditures (NHE) data compiled by the Centers for Medicare & Medicaid Services Office of the Actuary show that in CY 2022, Medicaid financed 30.6 percent of nursing home care and 60.6 percent of the category of other health, residential, and personal care that includes a variety of home and community-based services (MACStats).
Medicaid and CHIP have increased as a share of U.S. health care spending over time, along with Medicare and private insurance; in contrast, the out-of-pocket and other third-party payer shares of spending have decreased (MACStats). In addition, as health care has consumed a growing share of the nation’s economy, so have Medicaid and CHIP. Between CYs 1970 and 2023, total U.S. health care spending increased from 6.9 percent of gross domestic product (GDP) to 17.6 percent (CMS analyses of national health expenditures here).
Similarly, the programs represent a growing portion of the federal budget, having increased from 1.4 percent of federal outlays in FY 1970 to 10.3 percent in FY 2023; in comparison, Medicare increased from 3 percent of federal outlays to 13.7 percent (MACStats). Unlike Medicare, for which a substantial portion of federal spending is financed by dedicated revenue sources that include payroll taxes and enrollee premiums, federal spending for Medicaid and CHIP is financed by general revenues.
Medicaid accounts for a large share of state budgets (28.8 percent as of SFY 2022. However, Medicaid’s share of state budgets varies substantially depending on how it is measured. (MACStats table on state budgets).
Learn more from the following MACPAC resources:
Key statistics
Medicaid Enrollment and Spending
Annual Growth in Medicaid Enrollment and Spending
Total Medicaid Benefit Spending by State and Category
Medicaid Benefit Spending per Full-Year Equivalent Enrollee by State and Eligibility Group
Medicaid Benefit Spending by State, Eligibility Group, and Dually Eligible Status
Distribution of Medicaid Benefit Spending by Eligibility Group and Service Category
Medicaid Spending by State, Category, and Source of Funds
Medicaid as a Share of States’ Total Budgets and State-Funded Budgets
Historical and Projected National Health Expenditures by Payer
National Health Expenditures by Type and Payer
Additional background
Medicaid Spending in Context
Medicaid’s Share of State Budgets
Fact sheets
Medicaid Drug Spending Trends
Medicaid and CHIP in the Territories
Medicaid Home and Community-Based Services: Characteristics and Spending of High-Cost Users
Issue briefs
Changes in Spending and Use of Services after Becoming Dually Eligible for Medicare and Medicaid
The Impact of State Approaches to Medicaid Financing on Federal Medicaid Spending
Medicaid per Person Spending: Historical and Projected Trends Compared to Growth Factors in Per Capita Cap Proposals
Medicaid Spending for Prescription Drugs
In-depth analysis and policy recommendations
Trends in Medicaid Spending
Addressing Growth in Medicaid Spending: State Options
Mandatory and Optional Enrollees and Services in Medicaid