The Medicaid Program At A Glance Fact Sheet
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M e d i c a i d F a c t s
November 2008
THE MEDICAID PROGRAM AT A GLANCE
Medicaid, the nation's principal safety-net health insurance
In 2005, Medicaid provided coverage to:
program, covers health and long-term care services for 59 million
29.4 million children
low-income Americans, including children and parents, people with
15.2 million adults (primarily poor working parents)
disabilities, and seniors. Most children and parents covered by
6.1 million seniors
Medicaid are in working families. Without Medicaid, the vast
8.3 million persons with disabilities
majority of its enrollees would be uninsured.
Although seniors and people with disabilities make up just one-
Since its enactment in 1965, Medicaid has increased access to care
quarter of Medicaid enrollees, they account for 70% of Medicaid
for low-income people, functioned as the main payer of nursing
spending (Fig. 2). This pattern reflects Medicaid’s much higher
home and other long-term care, and supported the safety-net of
Figure 2
providers that serve low-income and uninsured people. Medicaid
Medicaid Enrollees and Expenditures
accounts for almost one-sixth of total personal health care spending
by Enrollment Group, 2005
in the United States (Fig. 1).
Elderly
10%
Elderly
Figure 1
Disabled
28%
Medicaid’s Role in
14%
Financing U.S. Health Care, 2006
Adults
Disabled
26%
42%
Medicaid as a share of national
personal health care spending:
43%
Children
Adults 12%
50%
Children 18%
Enrollees
Expenditures on benefits
16%
17%
13%
Total = 59 million
Total = $275 billion
9%
SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute
estimates based on 2005 MSIS data.
Total Personal
Hospital Care
Professional
Nursing Home
Prescription
Health Care
Services
Care
Drugs
Total
National
$1,762
$648
$660
$125
$217
per capita spending for the elderly and disabled, which is due to the
Spending
(billions)
more intensive use of acute and long-term care services by these
groups. In 2005, Medicaid spending was about $1,600 per child
SOURCE: Catlin et al. 2008. “National Health Spending in 2006: A Year of Change for Prescription
Drugs,” Health Affairs.
and $2,100 per non-disabled adult, compared with $13,500 per
disabled enrollee and $11,800 per elderly enrollee (Fig. 3).
The federal government and the states jointly finance Medicaid,
Figure 3
and the states administer the program within broad federal
guidelines. The federal share of Medicaid spending is at least 50%
Medicaid Payments Per Enrollee
in every state. It varies based on state per capita income relative to
by Acute and Long-Term Care, 2005
the national average and ranges as high as 76% in the poorest
$13,524
state. Overall, the federal government today finances 57% of
$11,839
Medicaid spending. Medicaid per capita spending for acute care
has been growing more slowly than private health spending per
capita and premiums for private health insurance.
Long-Term Care
Acute Care
Who does Medicaid cover?
$2,102
$1,617
To qualify for Medicaid, a person must meet financial criteria and
also belong to one of the “categorically eligible” groups: children;
Children
Adults
Disabled
Elderly
parents with dependent children; pregnant women; people with
severe disabilities; and the elderly.
SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute
estimates based on 2005 MSIS data.
Federal law requires that states offer Medicaid to all people in these
groups up to specified income thresholds; states cannot limit
What does Medicaid cover and how much does it spend?
enrollment or establish a waiting list. States also have broad
Medicaid purchases health care services primarily in the private
authority to expand Medicaid beyond these federal minimum
sector, contracting with managed care plans or paying for care on a
standards, and they have done so to varying extents. However,
fee-for-service basis. Medicaid covers a wide range of benefits to
states cannot use federal matching funds to cover non-disabled
meet the complex needs of the diverse populations it serves.
childless adults – no matter how poor they are – unless they obtain
a federal waiver.
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M e d i c a i d F a c t s
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commission
State Medicaid programs are generally required to cover:
Figure 5
inpatient and outpatient hospital services
Health Insurance Coverage
of the Non-Elderly by Poverty Level, 2007
physician, midwife, and certified nurse practitioner services
laboratory and x-ray services
100%
10%
5%
4%
nursing home and home health care for individuals age 21+
18%
29%
7%
35%
early and periodic screening, diagnosis, and treatment
75%
11%
Uninsured
(EPSDT) for children under age 21
27%
Medicaid/
family planning services and supplies
50%
92%
Other Public
45%
83%
rural health clinic/federally qualified health center services
71%
Employer/
Other Private
25%
44%
States can also receive federal matching funds for many “optional”
20%
0%
services, including prescription drugs, prosthetic devices, hearing
<100% 100-199% 200-299% 300-399% 400%
+
aids, and dental care.
Income as a Percent of Federal Poverty Level (FPL)
Note: The federal poverty level (FPL) was $21,203 for a family of four in 2007. Data may not total 100% due to rounding.
Until recently, states were required to offer the same benefits to all
SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute analysis of March 2008 Current
Population Survey.
their Medicaid enrollees statewide. However, the 2005 Deficit
Reduction Act (DRA) gave states authority to provide more limited
What is Medicaid’s role for people with high costs?
benefits for some groups and to offer different benefits to different
enrollees. The DRA also loosened longstanding restrictions on the
Many of the nation’s sickest and frailest people depend on Medicaid
use of premiums and cost-sharing in Medicaid.
for their coverage and care. Although these enrollees make up a
relatively small share of the Medicaid population, Medicaid
In 2006, Medicaid spent $304 billion for services (Fig. 4), of which:
spending is sharply skewed toward them. In 2004, the 1% of
acute-care services comprised over half (59%)
Medicaid enrollees with the highest health and long-term care costs
long-term care services made up 36%
accounted for one-quarter of Medicaid spending, and the highest-
payments for Medicare premiums accounted for about 3%
cost 5% accounted for 57% of all Medicaid spending (Fig. 6).
Figure 6
Figure 4
5% of Medicaid Enrollees Accounted for 57%
of Medicaid Spending in 2004
Medicaid Expenditures by Service, 2006
DSH Payments
Enrollees
Expenditures
Inpatient
5.6%
Home Health and
14.1%
Personal Care
95% of Enrollees
14.8%
Top 5% of Spenders
Physician/ Lab/ X-ray
43%
3.8%
Mental Health
1.0%
Outpatient/Clinic
95%
Long-Term
ICF/MR
Acute
6.8%
Care
4.3%
Care
35.8%
Drugs
58.5%
57%
5.5%
Nursing
Facilities
Other Acute
15.7%
5%
6.9%
Payments to Medicare
Total = 57.4 million
Total = $265.4 billion
Payments to MCOs
3.3%
18.0%
SOURCE: Kaiser Commission in Medicaid and the Uninsured and Urban Institute
Total = $304.0 billion
estimates based on 2004 MSIS.
NOTE: Total may not add to 100% due to rounding. Excludes administrative spending,
adjustments and payments to the territories.
SOURCE: Urban Institute estimates based on data from CMS (Form 64), prepared for the Kaiser
Commission on Medicaid and the Uninsured.
“Dual eligibles,” low-income Medicare enrollees who also
receive Medicaid, account for about 45% of Medicaid spending.
About 6% of Medicaid spending is attributable to supplemental
Dual eligibles rely on Medicaid to pay Medicare premiums and cost-
payments to hospitals that serve a disproportionate share of
sharing and to cover critical benefits that Medicare does not cover,
indigent patients, known as “DSH.” DSH helps to support safety-
especially long-term care. Until 2006, Medicaid covered
net hospitals that provide substantial uncompensated care.
prescription drugs for dual eligibles. Now, Medicare covers drugs
under a new Part D, but states make a monthly “clawback” payment
What is Medicaid’s role in the health insurance system?
to the federal government to help finance the benefit.
Medicaid is a key source of coverage for poor and near-poor
Outlook
Americans (Fig. 5). More than 1 in 4 children, including over 60%
of poor children and 40% of those near poverty, rely on the program
In the current economy, as unemployment, falling income, and
for coverage. Due largely to Medicaid and the smaller State
eroding job-based insurance leave more people uninsured,
Children’s Health Insurance Program (SCHIP), the rate of children
expanding coverage is likely to be high on the nation’s policy
without health insurance fell by more than one-third between 1997
agenda. As the new Administration and Congress, as well as
and 2005, from 23% to 14%, despite declining job-based health
individual states, deliberate about how to move forward, they can be
coverage. Over the same period, the uninsured rate rose among
expected to consider Medicaid a platform for increasing coverage for
adults, for whom Medicaid eligibility is much more restrictive.
the low-income population. As the baby-boomers age and financing
long-term care becomes a more pressing issue, Medicaid’s central
During economic downturns, rising unemployment and declines in
role in this area is likely to gain more attention. Understanding
income cause more workers and their families to lose their health
Medicaid and the diverse populations and needs it serves helps to
coverage. By design, the Medicaid program expands at such times,
ensure that public policy affecting the program will appropriately
mitigating increases in the number of uninsured.
address the opportunities, issues, and challenges ahead.
This publication (#7235-03) is available on the Kaiser Family Foundation’s
website at www.kff.org.
The Kaiser Commission on Medicaid and the Uninsured provides information and analysis on health care coverage and access for the low-income population,
with a special focus on Medicaid’s role and coverage of the uninsured. Begun in 1991 and based in the Kaiser Family Foundation’s Washington, DC office, the
Commission is the largest operating program of the Foundation. The Commission’s work is conducted by Foundation staff under the guidance of a bipartisan
group of national leaders and experts in health care and public policy.
