Medicaid provides coverage for a broad range of acute and long-term care services to meet the diverse needs of program enrollees. Nationally, 60 percent of Medicaid spending goes toward acute care services and over a third of Medicaid spending goes toward long-term care services in institutions and in the community. About 5 percent of Medicaid spending is attributable to disproportionate hospital payments (DSH) directed toward hospitals that serve a disproportionate share of low-income and uninsured patients. Medicaid also assists dual eligibles, the 9 million low-income elderly and disabled Medicare beneficiaries who qualify for coverage based on their low income, with Medicare premiums and cost-sharing. Medicaid covers important services that Medicare limits or does not cover, especially long-term care (Table 9).
Spending by Service
- The distribution of Medicaid spending varies considerably across states depending on the proportion of program enrollees who are low-income children and their parents, who rely on Medicaid primarily for health insurance coverage, versus elderly and disabled enrollees who need more costly long-term care services. Spending on long-term care as a percent of total Medicaid spending ranges from 22% in Georgia to 63% in North Dakota.
- States vary widely by the share of Medicaid long-term care spending dedicated to facilities versus home and personal care services and supports. Mississippi spends the majority of their Medicaid long-term care funds on facility care (88%) compared to Vermont and New Mexico which both spend over 70 percent of their funding on home and personal care services.
- Nationally, 5 percent of Medicaid spending goes to disproportionate share hospital (DSH) payments. Several states, including New Hampshire, Louisiana, New Jersey, Missouri, South Carolina, and Alabama spend over 10% of their Medicaid budget on DSH, contrasted with seven states including Hawaii, Wyoming, Rhode Island and North and South Dakota, which all spend less than 1% of their budget on DSH.
Dual Eligibles
- Dual eligibles account for 18% of Medicaid enrollees but 46% of Medicaid spending.
- Spending on the dual eligible population ranges from one-quarter of Medicaid expenditures in states in the West compared to nearly two-thirds of spending in states in the Northeast and Midwest.
- In the Midwest and Northeast, spending on dual eligibles is higher and they represent a greater proportion of the Medicaid population. This contrasts with the West, where there is a smaller share of dual eligibles and spending on these individuals is lower.
View related interactive table on statehealthfacts.org
