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President Trump released his new budget proposal Tuesday, and it includes a $610 billion cut over 10 years to the Medicaid budget.

That proposal is in addition to the $839 billion cut written into the American Health Care Act, should the bill become law. It was passed by the House earlier this month. That’s far from a sure thing, given big questions about the Senate’s plans for health care reform.

But if Medicaid is going to be slashed, it’s worth taking a look at exactly how the program spends its money now. After all, Medicaid accounts for $1 out of every $6 spent on health care in the US. But there are major differences in what that spending looks like on a state-by-state level. And certain services cost Medicaid far more than others.


Here’s a breakdown based on fiscal 2016 spending, in order of most to least expensive service.

Managed care plans

As a share of spending, nothing costs Medicaid more than managed care and health plans: Costs here account for nearly 46 percent of program spending.


This covers health insurance run through managed care organizations, which set up contracts with area health care providers to provide care for members at a discounted rate. Those organizations accept a set monthly fee from Medicaid for each member.

The states spending the most on managed care and health plans? California, New York, and Texas — the first, fourth, and second most populous states, respectively. (Florida, the third most populous state, accounts for the fifth-highest level of spending in this category.)

Acute care for everyone on Medicaid

On Medicaid and go for a doctor’s appointment or an X-ray? Need prescription drugs or dental work? All that counts as acute care spending in Medicaid’s budget, and it makes up the second-biggest line item in the program’s spending. Medicaid shelled out more than $145 billion in 2016, or about 26 percent of its entire budget, for acute care for enrollees.

The top spenders by state: Vermont, Alaska, and Oklahoma. (As the Kaiser Family Foundation notes: Some of Vermont’s long-term care spending is actually reported as acute care, which affects the rankings.)

Long-term care for the elderly and disabled

About 20 percent of Medicaid spending goes toward covering long-term care such as nursing homes. Most private health insurance doesn’t cover long-term care, meaning the elderly and disabled often have to pay out of pocket or rely on federal programs such as Medicaid to afford those services. Long-term care payments cover nursing homes, care facilities for individuals with intellectual disabilities, and home health care, among other services.

Help for hospitals that treat a high proportion of low-income patients

The federal government helps some hospitals cover the costs of treating a disproportionately high number of low-income individuals who are either on Medicaid or are uninsured. It’s what’s known as a disproportionate share hospital payment, or DSH payment.

Payments here make up a relatively small amount of federal Medicaid spending: just over 3 percent. That said, spending on DHS payments varies widely by state. They account for nearly 15 percent of Medicaid spending in Louisiana, the state with the highest rate of Medicaid spending on safety net hospitals.

Individuals who can’t pay Medicare premiums

Some individuals are eligible for both Medicaid and Medicare, the federal health insurance program for people age 65 and older.

Those individuals might not be making enough money to cover their premiums, deductibles, and other insurance costs. About 3 percent of Medicaid spending goes toward paying premiums for Medicare enrollees.

This story has been updated to reflect budget proposal numbers.

  • I really think it’s important for people to back up their statements by research to back it up. Just because you think it’s true doesn’t make it a true statement. It’s irresponsible to state your opinion as if it was a fact. And you need to fact check your sources. We all know we can sway results to prove our point.

  • The medical care for patients on Medicaid is as good as or superior to ACA or employer sponsored care. Full dental, orthodontist, eyeglasses, Ocver the Counter meds. As a senior citizen I am on Medicare but still pay out of pocket for dental and OTC and $149 month for supplement. My wive is stuck with Obummercare and now pays $600+ mo even though her income is only $12000. I get SS and a small pension. In my opinion Medicaid can well afford some trimming. Valid Americans in need like MH/MR, birth defects etc. But I object to the loafer SSDI fat, dump, stupid and lazy people, ex-cons and ignorant immigrants. Way toooooo much social services are wasted on these poor me loafers.

  • As a previous commenter already stated, these graphics really need to be per capita, otherwise they are all just population maps with no real information about the topic at hand…

  • These top view stats lead to misinterpretation and deceptive thinking.

    So what if NY and CA have 5 X the cost of the mean if NY and CA each have 10 X the population of the mean.

    Need to also show the per capita cost, state by state.

    Article should be updated to include state by state per capita cost tables and map charts.

  • Regarding Benji’s comments… Fraud should be aggressively pursued and prosecuted. However, the data is not on his side… Pre-ACA, Medicaid covered 9% of the elderly, 15% disabled, and 48% children. Pretty interesting to put work requirements on children and the elderly much less the disabled. I hope he never finds himself in the unfortunate position of caring for a disabled child, disabled himself, or proving work requirements at age 80. Facts are stubborn as are uninformed opinions:
    See data below:,%22sort%22:%22asc%22%7D

    • The elderly are not such a problem nor are children. ” Disabled” can have many variations. The mega morbidly obesed person who continues to eat junk yet claim disability cause they are so fat and slovenly that the have mobility problems and diabetes cause of their bad choices. The patients who claim some form of bogus mental Illness, released criminals who immediately get Medicaid, alcoholics, drug addicts, lazy loafers who fein some Illness, patients who complain of some type of extreme “soft tissue” pain, etc,etc. Then there are the adults and parents of those Medicaid kids who get Medicaid benefits and other service like Sect 8 housing and food stamps then have a boyfriend shack up and make money off the books. There is Solomon much rampant abuse it’s sickening. I know the struggle seniors, true physically and mentally deficient “retarded” people go through. The disabled with Bogus mental / emotional disorders cheat the truly needy.

    • Amanda- I had a disabled child with many health problems so I know from personal experience the value of SSD and Medicaid. Fortunately she was taken back to Heaven. I also have experience of seeing the many current abuses of the Welfare- Medicaid and Social Security Disability system.

  • Is health care a GOD given right? Or not? This has been the question for a long time. For thousands of years the Churchs’ took on the job of health care for the masses. Only recently did the government take over this job. I keep hearing folks talk about separation of Church and State, yet, it seems to only apply to one side of the equation, the big talkers are hippocrits. The Churches still own most of health care, Seventh Day Adventists have most of the world’s hospitals, Then Baptist Health Care system, then Catholic Health care system. It would be wise to stop being hippocrits and give this age old problem to the Church’s where it started, and where it belongs. Health care of the masses is a problem, it is just not a government problem. If one compares health care through time, the advent of government health care systems has only degraded the system and the results have been poor outcomes.
    One cannot have two masters, and this is a known fact. The government experiment of giving out medicaid to patients and then having the existing for profit system some how accomadate two systems within one delivery system, is clearly something the government would come up with. It demonstrates that the architects had no idea of the process, the whole gestalt of “goings on” of the U.S. health care system. If they would have made a separate system, it possibly would have better outcomes.
    Federal government programs have Indian Health (which has its own infrastructure, own buildings, own system), Vetrans Affairs (has its own infrastructure, etc), Military Health Care (has its own infra structure, etc),
    Public Health (Hybrid), The State’s opted to put medicaid patients into the existing for profit system, so, there are all kinds of rules, specific formularies for medicaid, specific soft goods, supplies, etc, but the for profit system does not have that. The Insurance companies, have gotten into the game of formularies, specific soft goods, specific procedures. The rules and regulations for all of these systems most likely costs as much as the service of health care.

    Basic Facts:
    Third parties always make things cost more and the third party typically expects to make the most dollars.
    Formularies with limits, Soft goods with limits, procedures with limits, is by definition practice medicine. The pharmacy laws are out of control. The Pedigree State Rules have allowed for a handful of pharmacists and pharmaceuticals to get FILTHY RICH, while the people are ripped off. Pedigree Pharmacy Laws Are EVIL and all involved need to be put in jail.

    If all of the health care was between the patient and the physician, prices would drop to 10 cents on the dollar. Government intervention, is displayed perfectly by the Pedigree Pharmacy States, a total ripoff of the people.

  • I’m not terribly upset about this cut. Medicaid patients get better services covered on the public tax roles. Many are capable to work or work of the books in legal and illegal pursuits.i work in healthcare and observe daily the fraud and abuse associated with this program. It about time it was scrutinized and benefits cut back.

    • If you see fraud and abuse report it. People who work low wage jobs often are not offered insurance. The Senate bill removes any requirement of employers to offer insurance. Medicaid was there, at least in some states, for low wage earners. We don’t value people’s work enough to pay them fairly. We don’t value them enough to see that there is affordable healthcare.

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