Historical and Projected Trends in Medicaid. IV. Historical Trends


The Medicaid program, as the safety net for much of the nation’s low-income population, bears an increasing responsibility for providing health coverage for this segment of the nation’s population. For the five year period from 1999 to 2004, total enrollment in the program increased by 42 percent. This growth coincides with an erosion of employer-sponsored health benefits. Private insurance has become less available and more costly for employees as employers shift more of the plan costs (coinsurance and copays) to their employees. And though the percent of premiums paid for by the employee has remained unchanged, the cost for their share of the premium continued to rise at a faster rate than income over the past decade. While median family income increased by 46 percent from 1993 to 2003, the average monthly worker contribution for family premiums increased 74 percent.8

Non-aged and non-disabled adults show the largest percentage increase in enrollment of the four major eligibility categories, growing from 8.9 million to 15.2 million between 1999 and 2004, an increase of 71 percent. Children experienced the largest numerical change from 20.6 million to 29.2 million, increasing by 42 percent.9 The disabled increased by 22 percent, while the aged increased 18 percent.10

Figure 1

Figure 1: Increase in Medicaid Enrollment, 1999-2004

Source: Office of the Actuary, CMS

Consistent with the rapid rise in enrollment, Medicaid expenditures increased at a faster rate than other insurance coverage types between 1999 and 2004. Overall Medicaid expenditures increased by 56 percent from $180.5 billion to $281.8 billion, with spending on adults increasing by 68 percent, the greatest increase among all enrollment categories.

These increases compare to increases of 51 percent for private insurance expenditures and 36 percent for Medicare over the same time period.

Figure 2

Figure 2: Increase in Medicaid Expenditures 1999-2004

Source: Office of the Actuary, CMS

Medicaid spending has risen faster than the rate of growth in the nation’s Gross Domestic Product. Consequently, Medicaid’s proportion of GDP had risen from 2.0 percent of GDP in 1999 to 2.5 percent in 2004.

8 ASPE calculations based on U.S. Census Bureau, Current Population Survey and KFF/HRET Survey of Employer Health Benefits, 2005
9 Some of the increase in the number of children covered under the Medicaid program may be due in part to outreach and educational efforts conducted under SCHIP enacted in 1997( PL 105-33).
10 Historical and projected information presented for Medicaid in this report exclude data from the SCHIP Program. Additionally, historical information excludes Puerto Rico and the Virgin Islands beyond 2001

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