An Overview of Medicaid

December 17, 2013

Medicaid was considered an afterthought to Medicare, but today more Americans receive health care coverage from Medicaid than from any other program, say Jason Fichtner and John Pulito of the Mercatus Center.

  • State Medicaid participation is technically voluntary, but all states participate, with federal and state governments sharing the costs of the program.
  • Eligibility for the program varies state to state, but participants cannot have income that exceeds a certain percentage of the Federal Poverty Level (today, that number ranges from $11,490 for a single person to $39,630 for a family of eight).

The Affordable Care Act originally mandated that states expand Medicaid, but after the Supreme Court's 2012 ruling, states now have the choice to decide whether to expand eligibility for the program.

  • While the federal government is covering a significant amount of Medicaid expenses, state budgets are still affected.
  • In 1967, when Medicaid started, it represented less than 3 percent of state budgets. Today, that number is at 24 percent and is likely to rise.
  • According to the Centers for Medicare and Medicaid Services, annual Medicaid expenditures are expected to increase by $500 billion between 2012 and 2021. That is a 108 percent increase.

If Medicaid spending continues on this trajectory -- even without state eligibility expansion -- the program is going to require increased state and federal resources.

Source: Jason J. Fichtner and John Pulito, "Medicaid Overview," Mercatus Center, December 11, 2013.

 

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