NCPA - National Center for Policy Analysis

Only 20 to 40 Cents of Each Medicaid Dollar Benefits Recipients

August 21, 2015

Medicaid is jointly funded by state and federal governments. It grows regardless of the state of the economy and its main purpose is to help those without enough income to pay for their medical care, says senior fellow John R. Graham of the National Center for Policy Analysis.

However, a study conducted in 2008 in Oregon found out that:

  • Medicaid increased the use of health services and reduced the risk of large out-of-pocket medical expenses.
  • Nevertheless, it did not improve mortality of any physical health measure.
  • Of a figure of $1,576 only $465 was directly related to health care. The rest only freed up resources for other types of consumption.
  • The net cost to taxpayers was $1,374 per recipient.
  • The amount of government spending that was simply transferred to providers was $2,222.
  • Yet Medicaid spending keeps growing, and is much larger than other welfare programs.

The author concludes that Medicaid spending should be reduced and the funds converted to vouchers instead of being paid to providers directly, says Graham.

Source: John R. Graham, "Only 20 to 40 Cents of Each Medicaid Dollar Benefits Recipients" Providence Journal, August 16, 2015.

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