Historical and Projected Trends in Medicaid. V. Current Medicaid Data


a. Federal/State Spending

Medicaid expenditures continue to rise along with health care spending in general. The total expenditures for Medicaid by both federal and state sources were $298 billion in 2004. This represents 2.5 percent of the nation’s Gross Domestic Product (GDP) and 15.9 percent of the nation’s total health spending of $1.9 trillion. The federal share of Medicaid expenditures has averaged 57 percent of the overall total for the past decade.

Table 1

2004 Medicaid (billions)$176.40$121.60$298.00
Medicaid Spending as % of GDP1.5%1.0%2.5%

Source: President’s FY 2007 Budget Baseline for Medicaid Program, CMS

b. Enrollment

The CMS Office of the Actuary’s (OACT) most recent report estimates the number of Medicaid enrollees at 58.6 million for 2004. 

As shown in Figure 3, children are the largest segment of Medicaid enrollees. Of the four major categories of individuals covered under Medicaid, children numbered 29.2 million in 2004. There were 15.2 million adults enrolled in Medicaid, 8.9 million disabled and 5.3 million aged.

Figure 3

Figure 3: Medicaid Enrollment, 2004

Source: President's FY 2007 Budget Baseline for Medicaid, CMS

The proportion of total enrollment that each category represents is very different from the proportion of expenditures paid on behalf of each category. This discrepancy can be seen in the distributions presented in Figure 4.

Children make up the largest number of enrollees covered under Medicaid, but utilize a much smaller relative amount of services as measured by dollars expended on their behalf. As shown in Figure 4 below, children represent half of all enrollees, but only 19 percent of total expenditures, whereas the aged represent only ten percent of enrollees but consume 25 percent of total expenditures. Similarly, the blind and disabled represent only 17 percent of Medicaid enrollment but represent 44 percent of Medicaid expenditures. The discrepancy between enrollment and expenditures is dramatically reflected in the different federal per capita costs for the four groups. OACT estimates that per capita expenditures for these categories range from a low of $1,200 per child in 2004 to a high of $8,600 per aged enrollee.

Figure 4

Figure 4: Distribution of Medicaid Enrollees and Expenditures by Basis of Eligibility, 2004

Source: President's FY 2007 Budget Baseline for Medicaid, CMS
Note: Total expenditures on benefits exclude DSH payments.

c. Expenditures by Service Type

When looking at Medicaid expenditures by service type (see Figure 5), the largest category of spending is for nursing facility costs. Individuals receiving these services are mainly the aged and disabled, but may also include some children and adults.

Health insurance payments and hospitals represent the next largest categories of expense. Health insurance payments include payments to Medicare for the low-income elderly’s premiums, coinsurance and deductibles; premiums to group and pre-paid health plans (including HMO capitation and Medicaid managed care payments); premium assistance programs on behalf of low-income workers toward their share of employer plan premiums; and other premium payments. Hospital care includes both inpatient and outpatient care, as well as mental health hospital care.

Other major categories of expense include home health services and prescription drugs.

Figure 5

Figure 5: Medicaid Expenditure by Service Type, 2004

Source: President's FY 2007 Budget Baseline for Medicaid, CMS

d. Distribution of Enrollees by Age

As displayed in Table 2, half of all persons enrolled in Medicaid are under age 18. For the year 2003, the latest year available with detailed age data, one-fifth of all Medicaid eligibles were age 5 and under. Another 22 percent were between ages 6 and 14, and 8 percent between ages 15 and 18. Together, children account for half of all eligibles. Adults ages 19 to 64 and the elderly age 65 and over, represent 39 percent and 10 percent, respectively.

Medicaid Eligibles - Fiscal Year 2003. By Age Group

Medicaid Eligibles - Fiscal Year 2003

By Age Group – All States

Age GroupNumber
UNDER 12,078,549
AGE 1-59,067,236
AGE 6-1412,104,360
AGE 15-184,525,249
AGE 19-201,923,773
AGE 21-4414,132,129
AGE 45-645,317,461
AGE 65-742,457,045
AGE 75-842,124,726
AGE 85 >1,299,393

Source: Medicaid Eligibles, FY 2003, MSIS, (http://www.cms.hhs.gov/MedicaidDataSourcesGenInfo/Downloads/MSISTables2003.pdf)

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