Spending distribution of Medicare and Medicaid 2020

In 2020, Medicare and Medicaid national health expenditures reached 829 billion U.S. dollars and 671 billion U.S. dollars, respectively. The largest expense category for both healthcareh care programs was hospital care.

Long-term care solutions

Medicaid’s second-largest expense category was other health care, which includes programs that provide alternatives to long-term institutional services. The use of home- and community-based services can substantially reduce expenditures for enrollees who would otherwise have to receive care in an institutional setting, such as a nursing home. In recent decades, there has been a significant shift in the distribution of Medicaid’s long-term care services expenditures.

Medicaid’s federal-state partnership

Medicare is a health insurance program solely funded by the federal government, whereas Medicaid plays an important role in both federal and state budgets. The federal government establishes certain parameters for all states to follow, but states can decide who gets coverage and what gets covered in its version of Medicaid. In 2018, California was the state with the highest Medicaid expenditure.