Since its creation in 1965, Medicaid became the largest source of medical and health-related services for U.S. Americans with a low income and limited resources. In 2016, Medicaid’s share of total U.S. health care spending amounted to 17 percent. The program is funded by both federal and state government. As the percentage of people under Medicaid was growing during the last decade, Medicaid spending was increasing, too.
According to estimates of the Centers for Medicare and Medicaid Services (CMS), more than 70 million people were enrolled in Medicaid in 2016. The breakdown of the enrollment shows us that over 40 percent of them are children; other groups include adults, disabled, and aging people. While the enrollment group of disabled persons makes up only one fifth of all Medicaid enrollees, their share of Medicaid expenditures is by far the largest.
In 2016, Medicaid expenditures were near 600 billion U.S. dollars for the first time, with the federal share some 140 billion dollars higher than the state funds. Among all U.S. states, California has the highest Medicaid spending, followed by New York, Texas, and Pennsylvania. Medicaid’s expenditure as a percent of total U.S. health costs is especially significant in the area of personal and residential care, Medicaid hospital costs make up almost one fifth of total U.S. hospital costs.
With the Patient Protection and Affordable Care Act, Medicaid’s role within U.S. health care became even more prominent. From 2014, the federal health care law implemented a substantial increase in Medicaid eligibility. Projections show us distinctly higher numbers in Medicaid enrollment starting that year. Medicaid expenditure projections anticipated a similar trend, with spending almost doubled between 2014 and 2024. However, with the newly elected Trump administration's efforts to repeal Obamacare, further development of Medicaid expansion is quite uncertain.
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