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
, 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 90 million people were
in 2022. The
shows that 36.9 percent are children. Other groups include adults and newly eligible adults (under Medicaid expansion), disabled, and the elderly. While disabled persons make up only 11.4 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 2022,
Medicaid expenditures reached nearly 824 billion U.S. dollars for the first time, with the federal share some 340 billion dollars higher than the state funds. The program's costs accounted for around 18 percent of all
U.S. health expenditures in 2023. 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. However, unlike the mandatory Medicaid expansion the health reform envisioned, expanding Medicaid was a decision left for each state. Currently, 10 states have yet to expand Medicaid leaving an estimated 1.8 million
uninsured in the "coverage gap". Medicaid
enrollment and overall spending growth peaked when the ACA was implemented, and then they slowed or dropped in the years that followed. During the COVID pandemic, the U.S. federal government passed several pieces of legislation that together provided trillions of dollars in relief. All the policies that provided continuous Medicaid coverage during the pandemic ended on March 31, 2023. States started terminating Medicaid for all those who did not meet eligibility requirements beginning April 1st, 2023. Due to Medicaid unwinding, over 22 million Medicaid enrollees have been disenrolled as of 4th June 2024. The high Medicaid disenrollment numbers are concerning as those who have lost coverage are more likely to stay uninsured.
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Due to varying update cycles, statistics can display more up-to-date
data than referenced in the text.
