Medicaid Per Enrollee Spending: Variation Across States
Issue Brief
When examining the per aged enrollee growth rate, we excluded prescription drugs spending. Beginning in FY 2006, Medicare began covering prescription drug spending through Part D. Consequently, spending per enrollee dually eligible for Medicare and Medicaid dropped between FY 2005 and FY 2006. Although this change in policy is important when considering what past spending in Medicaid can tell us about future spending, when looking at aged per enrollee spending over the FY 2000-2011 period, we decided to focus on the variation by state, rather than incorporating the effect of change in national policy.
Per capita growth was slower during the 2007-2009 recession and the following years of recovery than during the early 2000s. The slow growth in the later 2000s is likely attributed the increased pressure on states to balance their budgets, as well as a slowly improving economy.
The correlation coefficient shows the strength and direction of linear correlation between two variables. It ranges from -1 to 1. A negative correlation coefficient indicates an inverse linear relation between the two variables, as seen here. The closer the absolute value of the correlation coefficient is to 1, the closer the two variables are to a perfect linear relationship.
See L. Snyder, R. Rudowitz, R. Garfield, and T. Gordon, Why Does Medicaid Spending Vary Across States: A Chart Book of Factors Driving State Spending, Kaiser Commission on Medicaid and the Uninsured, November 2012. http://www.kff.org/medicaid/report/why-does-medicaid-spending-vary-across-states/. See also G. Cuckler and A. Sisko, Modeling Per Capita State Health Expenditures, Medicare & Medicaid Research Review, 2013, Volume 3(4). http://www.cms.gov/mmrr/Articles/A2013/MMRR2013_003_04_a03.html.
