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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.

General Medicine, The Post-Hospitalist Company, specializes in the care of post-acute care patients living in long-term care settings. Our practitioners hold regular, onsite hours and provide 24/7 on call services.

Learn more about how we are changing the way long-term care is provided across the country. Contact us today to better understand how we can aid your MCO with readmission rates, spending and more.


Tom Prose

CEO at General Medicine, P.C.
As founder and CEO of General Medicine PC, the nation’s premier post-hospitalist care company,Tom Prose leads an exceptional team of internal medicine, geriatrics and healthcare administration specialists.
Tom Prose