5% of Medicaid enrollees account for 50% of total spending

Only 5% of Medicaid-enrolled Americans account for 50% of total Medicaid spending, and the top 1% account for almost 25% of spending, according to a new study from the Government Accountability Office (GAO).

This “disproportionately large share” of expenditures has remained consistent in fiscal years 2009 to 2011, the report notes, with the least expensive 50% of Medicaid-only enrollees making up less than 8% of total Medicaid spending. The data was from 2011, the most recent year in which data could be compiled.

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The report only counts individuals that solely use Medicaid as opposed to those that use Medicaid and Medicare. The report also concludes that Medicaid costs will increase because of Medicaid expansion made possible through Affordable Care Act (ACA).  

According to the report, certain categories of Medicaid-only recipients had more expenditures than others. Over 52% of high-expenditure enrollees had mental health conditions in 2011. That percentage stayed relatively constant from 2009, when 50.13% of enrollees were in the same category. In non-high expenditure categories, only 13% had mental health conditions. In fact, there was a surprising consistency for all categories, with none having variations of more than a three percentage points.

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The distribution of enrollee’s high-expenditure services varied, since each state can distribute Medicaid spending as they see fit. In fiscal year 2011, Tennessee, which did not expand Medicaid under the ACA, had the highest percentage of expenditures for managed care or premium assistance, at 75.2%.  At the other end of the spectrum, Alaska, Idaho, New Hampshire and Wyoming all had 0% of their expenditures in that category. The national average was 14.54%.

Mississippi had the highest percentage of Medicaid-only enrollee spending on hospital care (45.25%), while Tennessee spent 0%. The national average in that category was 27.24%. These two examples show the wide swing of how states allocate their Medicaid spending.

Fewer than 10% of Medicaid-only recipients were disabled, but they were disproportionately in the high-expenditure group; 64% of Medicaid spending went to those in the disabled group. Children were the largest group of Medicaid-only recipients, but they only received 16% of the money spent.

“Studies on healthcare spending generally find that a small percentage of individuals account for a large portion of expenditures, and Medicaid…is no exception,” the GAO concluded in an open letter.