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4.3 percent of Medicaid beneficiaries receive a third of all benefits

In 2012, Medicaid spent $435.5 billion on 72.6 million providing healthcare coverage to its beneficiaries. Since then, the Affordable Care Act has prompted many states to expand Medicaid services to even more people.

A February 2014 report from the Government Accountability Office (GAO) used data from the most recent fiscal year, 2009, available to determine how the money is spent. In 2009, Medicaid spent $314.3 billion and had 64.4 million enrollees.

dollar-sign-medicaid-beneficiariesMedicaid Spending by group

  • 6% is spent on 4.3% of enrollees, a group known as high-expenditure beneficiaries.
  • 1% is spent on the remaining 81.2% of Medicaid-only enrollees.
  • 2% is spent on dual-eligible enrollees, those who receive Medicare coverage in addition to Medicaid.

Most dual-eligibles fall into one of two categories: low-income seniors, 65 and older and those under 65 with a disability. Fifty-one percent of expenditures for full benefit dual-eligible beneficiaries was spent on providing services to just 10% of them, according to a 2007 study.

Per capita spending for high-expenditure beneficiaries is 18 times as much as it is for all other beneficiaries. Dual enrollees are considerably more expensive for both groups.

Annual per capita Medicaid spending

  • Medicaid-only high-expenditure beneficiaries – $35,983
  • Medicaid-only all other beneficiaries – $1,989
  • Dual-eligible high-expenditure beneficiaries – $89,440
  • Dual-eligible all other beneficiaries – $7,762

The elderly and disabled make up the largest segments of the high-expenditure group – 66.3% of Medicaid-only high-expenditure beneficiaries are disabled.

Spending at the state level for high-expenditure Medicaid-only beneficiaries varies from $20,896 to $83,365.

Almost 65% of the total cost for high-expenditure Medicaid-only beneficiaries goes to hospital and long-term care services, compared to 42.8% for the remaining group of enrollees.

  • 6% for hospital services
  • 3% for non-institutional long-term care services
  • 7% for institutional long-term care services

Medications, managed care and premium assistance, and non-hospital acute-care accounted for the rest of the expenditures.

For the remaining non-high-expenditure Medicaid enrollees the bulk of the expenditures is spent on managed care and premium assistance.

  • 2% for managed care and premium assistance
  • 6% for non-hospital acute-care
  • 9% for hospital services
  • 7% for drugs
  • 5% for non-institutional long-term care services

For disabled high-expenditure Medicaid-only beneficiaries institutional, non-institutional long-term services and hospitalizations account for nearly two-thirds of overall spending.

  • 5% for non-institutional long-term care services
  • 8% for hospital services
  • 9% for institutional long-term care services.

For disabled, but non-high-expenditure, Medicaid-only enrollees more than half went to managed care and premium assistance.

  • 1% for managed care and premium assistance
  • 1% for institutional long-term care services

Overall, in the group of disabled Medicaid-only enrollees, high-expenditure enrollees account for 79.5% of spending.

For aged Medicaid-only beneficiaries, non-high-expenditures and high-expenditure groups had required long-term care services.

High-expenditure Medicaid-only aged enrollees

  • 6% for hospitalizations
  • 2% for institutional long-term care services
  • 4% for non-institutional long-term care services

Non-high-expenditure Medicaid-only aged enrollees

  • 3% for managed care and premium assistance
  • 2% for drugs
  • 7% for hospital services
  • 6% for non-hospital acute care.

The high-expenditure group accounted for more than 73% of total expenditures for the aged, Medicaid-only group.

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Tom Prose
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