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Trends in Medicaid Spending

Chapter 1 examines national Medicaid spending trends through a variety of lenses, comparing the growth in Medicaid spending as a share of national health expenditures and federal and state budgets. The chapter also examines the components of spending growth.

Medicaid is growing as a share of federal and state budgets and as a share of national health expenditures and gross domestic product. But at the same time, Medicaid spending overall is expected to grow at a slower rate than Medicare and private insurance—growth in spending per enrollee has been lower than or comparable to Medicare and private insurance since the early 1990s. More than two-thirds of expenditure growth since the mid-1970s has been due to enrollment growth, reflecting the program’s important role in providing coverage for millions of low-income individuals and families who otherwise would have no source of health insurance.

The chapter also examines recent changes in Medicaid spending, including the impact of many states’ expansion of coverage to the new adult group and the increase in spending brought on by the introduction of high-cost specialty drugs. It concludes with projections in enrollment and spending growth by eligibility group for future years.

From: June 2016 Report to Congress on Medicaid and CHIP