Total Medicaid federal and state expenditures in the U.S. 1966-2019

Medicaid expenditure totaled around 639 billion U.S. dollars in 2019, increasing for the 13th consecutive year. The federal government paid approximately 60 percent of total Medicaid expenditures in 2019, with states picking up the other 40 percent.

Medicaid’s high cost enrollees

Spending on aged enrollees and individuals with disabilities accounted for more than half of the total Medicaid expenditure in 2017. One reason why this share is so high is that these groups require greater health care, and often the services are more costly. Spending on long-term care services, which includes nursing facilities and home health care, totaled approximately 125 billion U.S. dollars in 2018. Overall, long-term care services accounted for around 20 percent of all Medicaid expenditure in 2018.

The basics of Medicaid funding

Medicaid is a joint federal and state health care plan, and the costs of administering the program are split between the two. States report their Medicaid costs to the federal government on a quarterly basis, and the federal government matches those costs based on a formula. This formula is designed so that the federal government pays a larger share of costs in poorer states, but in general, state costs are matched by the federal government at a 50 percent rate. California was the state with the highest Medicaid costs in 2018.