Combined federal and state expenditures for Medicaid accounted for 18 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 28.9 percent of U.S. health care spending (MACStats, Exhibit 3).
Medicaid’s unique role
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 percent of nursing home care and 60 percent of the category of other health, residential, and personal care that includes a variety of home and community-based services (MACStats, Exhibit 3).
Medicaid spending trends
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, Exhibit 12). In addition, as health care has consumed a growing share of the nation’s economy, so have Medicaid and CHIP (MACPAC analysis of national health expenditures here).
Similarly, the programs represent a growing portion of the federal budget (MACStats, Exhibit 4). 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’s share of state budgets
The state (often referred to as nonfederal) share of Medicaid comes from a variety of sources, but at least 40 percent must be financed by the state and up to 60 percent may come from local governments. Medicaid’s share of state budgets varies across states and differs substantially depending on how it is measured (MACStats, Exhibit 5 and Exhibit 13).
Learn more about Medicaid and CHIP spending in the most current compilation of MACStats tables and figures.