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Medicaid - Statistics & Facts

Since its creation in 1965, Medicaid has become the largest source of medical and health-related services for U.S. Americans with a low income and limited resources. Unlike Medicare, which is a federal run and funded program, Medicaid is funded by both federal and state governments but is run by individual states following federal guidelines. According to estimates of the Centers for Medicare and Medicaid Services (CMS), over 75 million people were enrolled in Medicaid in 2019. The distribution of Medicaid enrollees by eligibility group shows that 37.5 percent are children. Other groups include adults and newly eligible adults (under Medicaid expansion), disabled, and the elderly. While disabled persons make up only 12 percent of all Medicaid enrollees, their share of Medicaid expenditures is by far the largest.

Medicaid expenditures

As the percentage of people under Medicaid has grown over the last decade, Medicaid spending has also increased. In 2019, Medicaid expenditures reached nearly 640 billion U.S. dollars for the first time, with the federal share some 150 billion dollars higher than the state funds. The program's costs accounted for around 16 percent of all U.S. health expenditures in 2021. Among all U.S. states, California has the highest Medicaid spending, followed by New York, Texas, and Pennsylvania. Medicaid covered nearly 58 percent of residential and personal care, while almost one fifth of total U.S. hospital costs was paid by Medicaid.

CHIP – Children’s health insurance program

The Children’s health insurance program (CHIP) was introduced in 1997 to provide low-cost health coverage for children (18 years and younger) in families that earn too much to qualify for Medicaid, but not enough to buy private health insurance. According to federal requirements, CHIP is administered by states and therefore eligibility limits for CHIP differ by state as well. Like Medicaid, CHIP is also jointly funded by states and the federal government, however at a higher matching rate to encourage state participation. Unlike Medicaid though, several states require premium contribution or enrollment fees, or other cost-sharing for the use of health services.

Medicaid and the ACA

With the Affordable Care Act, Medicaid’s role within U.S. health care has become even more prominent. From 2014, the federal health care law implemented a substantial increase in Medicaid eligibility and was reflected in the largest enrollment growth in the past three decades. However, unlike the mandatory Medicaid expansion the health reform envisioned, expanding Medicaid was a decision left for each state. Currently, 12 states have yet to expand Medicaid leaving an estimated 2.2 million uninsured in the "coverage gap". In 2021, the COVID-19 relief bill, otherwise known as the American Rescue Plan offered even more incentives to these holdout states to expand Medicaid, especially during an international health crisis. However, so far, all 12 of these mostly Southern states are still refusing.

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