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Trends in Medicaid Spending Leading up to ACA Implementation

Table 1: National Medicaid Expenditures, by Spending Category and Year, FY 2007-2013
Expenditure Category
Expenditures (in billions) Average Annual Growth Rate
2007 2008 2009 2010 2011 2012 2013 2007-2010 2010-2013 2007-2013
Total Spending 330.3 350.9 377.4 400.1 425.8 429.2 454.0 6.6% 4.3% 5.4%
Total Medical Services 292.7 309.3 336.7 357.8 381.5 383.6 407.1 6.9% 4.4% 5.7%
Acute Care1 185.3 196.2 216.5 237.1 258.5 260.9 284.0 8.6% 6.2% 7.4%
Hospitals & Physicians2 82.3 82.6 90.3 93.3 103.6 95.2 99.8 4.3% 2.3% 3.3%
Medicaid Managed Care2 60.7 70.1 80.5 90.5 101.8 117.5 136.2 14.2% 14.6% 14.4%
Other Acute Care2,3 26.3 27.2 28.8 36.2 37.1 38.4 40.2 11.2% 3.6% 7.3%
Prescription Drugs 15.0 15.3 15.7 15.8 14.7 8.6 6.6 1.8% -25.3% -12.8%
Prescribed Drugs Excluding Rebates 22.4 23.7 25.5 27.3 29.8 23.2 19.8 6.9% -10.2% -2.0%
Prescription Drug Rebates2 (7.3) (8.4) (9.8) (11.5) (15.1) (14.7) (13.2) 16.2% 4.6% 10.3%
Long-Term Care 107.4 113.0 120.2 120.7 123.0 122.7 123.0 4.0% 0.6% 2.3%
Institutional Long-Term Care2 64.3 66.0 68.2 66.6 68.1 67.4 66.5 1.2% 0.0% 0.6%
Home Health/Personal Care2,4 43.1 47.0 52.0 54.1 55.0 55.2 56.5 7.9% 1.5% 4.6%
Medicare Payments2,5 11.0 11.8 12.0 13.7 15.0 14.5 14.8 7.4% 2.6% 5.0%
DSH 15.4 17.7 17.7 17.6 17.3 17.1 16.4 4.4% -2.3% 1.0%
Inpatient Hospital – DSH 13.0 14.4 14.7 14.7 14.3 14.3 13.4 4.2% -2.9% 0.6%
Mental Health Facility – DSH 2.5 3.3 3.0 2.9 2.9 2.7 2.9 5.3% 0.4% 2.8%
Medical Services Adjustments6 (5.2) (5.5) (7.3) (6.9) (7.5) (8.0) (7.1) 9.4% 1.1% 5.2%
Administration7 16.4 17.6 18.3 17.9 19.5 22.1 22.8 2.9% 8.5% 5.7%
SOURCE: Urban Institute estimates based on data from Medicaid Financial Management Reports (HCFA/CMS Form 64). Annual expenditures reflect nominal spending for the federal fiscal year.
1. The “Acute Care” total here includes EPSDT screening spending, which amounted to $0.9B, $1.0B, $1.2B, $1.3B, $1.3B, $1.2B, and $1.3B in FFY 2007, 2008, 2009, 2010, 2011, 2012, and 2013, respectively.
2. The CMS-64 was revised beginning with FFY 2010 data, and beginning that year, this category may not be comparable to that of previous years.
3. Includes dental, other practitioners, abortion, sterilization, PACE programs, emergency services for undocumented aliens, and other care services.
4. Includes home health services, home- and community-based waiver services, personal care, and related services.
5. Includes premiums paid for those dually eligible for Medicaid and Medicare as well as Medicare deductibles and coinsurance for Qualified Medicare Beneficiaries (QMBs).
6. Includes collections for overpayments.
7. Includes immigration status verification system, preadmission screening, family planning, nurse aide training, external quality review, and enrollment broker costs.
Table 2: Annual Growth in Spending Per Enrollee by Type of Service, FY 2007 – 2013
  Annual Growth Rate Average Annual Growth Rate
Service Category 2007-2008 2008-2009 2009-2010 2010 – 2011 2011-2012 2012-2013 2007-2010 2010-2013 2007-2013
Medical Services 2.7% 3.0% 0.8% 2.2% -2.4% 4.3% 2.2% 1.3% 1.7%
Acute Care 2.8% 3.4% 3.1% 4.2% -1.9% 7.0% 3.1% 3.1% 3.1%
Hospitals & Physicians -2.5% 2.7% -2.6% 6.3% -10.7% 3.0% -0.8% -0.7% -0.8%
Medicaid Managed Care 12.0% 6.9% 5.3% 7.5% 12.2% 14.0% 8.0% 11.2% 9.6%
Other Acute Care1 0.3% 0.0% 18.8% -1.8% 0.7% 2.8% 6.0% 0.5% 3.2%
Prescription Drugs -1.2% -2.9% -4.6% -11.3% -43.3% -24.2% -2.9% -27.5% -16.1%
Long-Term Care 2.6% 2.6% -3.2% -1.9% -3.4% -1.4% 0.6% -2.3% -0.8%
Institutional Long-Term Care 0.0% -0.4% -5.8% -1.7% -4.0% -3.0% -2.1% -2.9% -2.5%
Home Health/Personal Care2 6.3% 6.7% 0.2% -2.2% -2.6% 0.5% 4.4% -1.4% 1.4%
SOURCE: Urban Institute estimates based on data from Medicaid Financial Management Reports (HCFA/CMS Form 64), Medicaid Statistical Information System (MSIS), and KCMU/HMA enrollment data. Expenditures reflect nominal spending and exclude payments made under CHIP, Medicare premiums paid by Medicaid for persons eligible for both programs, Disproportionate Share Hospital (DSH) payments, administrative costs, and accounting adjustments. FY 2010 Medicaid Statistical Information System data was used for the proportion of each service category that is represented by the aged/disabled or families. Due to lack of availability of FY 2010 MSIS data for Idaho, FY 2009 Idaho MSIS data adjusted to the given state’s 2010 CMS-64 expenditures was used.
1. Includes dental, other practitioners, abortion, sterilization, PACE programs, emergency services for undocumented aliens, and other care services. Other care services could not be calculated separately from other acute care services due to data limitations.
2. Includes home health services, home- and community-based waiver services, personal care, and related services.
Table 3. Average Annual Changes in Enrollment and Medicaid Expenditures on Medical Services by Eligibility Group, FFY 2007 – 2013
    Average Annual Growth Rate
2007 2008 2009 2010 2011 2012 2013 2007-2010 2010-2013 2007-2013
Total Spending ($ Billions)
All Enrollees $293 $312 $342 $366 $390 $394 $414 7.7% 4.2% 6.0%
Families1 $99 $107 $123 $138 $152 $156 $169 11.8% 7.1% 9.4%
Aged & Disabled $194 $205 $219 $228 $239 $238 $245 5.5% 2.3% 3.9%
Enrollment (Millions)
All Enrollees 42.4 43.7 47.1 50.5 53.0 54.4 55.3 6.1% 3.1% 4.5%
Families1 30.0 31.0 34.0 36.9 38.8 39.8 40.5 7.2% 3.1% 5.1%
Aged & Disabled 12.4 12.7 13.1 13.6 14.1 14.6 14.8 3.3% 2.9% 3.1%
Spending Per Enrollee
All Enrollees $6,909 $7,150 $7,249 $7,245 $7,371 $7,234 $7,486 1.6% 1.1% 1.3%
Families1 $3,286 $3,462 $3,606 $3,734 $3,904 $3,919 $4,187 4.4% 3.9% 4.1%
Aged & Disabled $15,708 $16,171 $16,678 $16,769 $16,891 $16,280 $16,478 2.2% -0.6% 0.8%
SOURCE: Urban Institute estimates based on data from Medicaid Financial Management Reports (HCFA/CMS Form 64), Medicaid Statistical Information System (MSIS), and KCMU/HMA enrollment data. Expenditures reflect nominal spending and exclude payments made under CHIP, Medicare premiums paid by Medicaid for persons eligible for both programs, Disproportionate Share Hospital (DSH) payments, administrative costs, and accounting adjustments. Total spending levels and growth rates differ from those presented in previous tables because the data source and method used to calculate total spending are different. Total spending reflects sums of spending by eligibility group which is calculated by taking the 2007 MSIS spending level for each eligibility group and applying the corresponding growth rates. FY 2010 Medicaid Statistical Information System data was used for the proportion of total spending for an eligibility group that is represented by a particular service. Due to lack of availability of FY 2010 MSIS data for Idaho, FY 2009 MSIS data for this state adjusted to the given state’s 2010 CMS-64 expenditures was used. This method is described in more detail in Appendix A. Growth rates for CPI-U Medical Care come from the Bureau of Labor Statistics, Consumer Price Index Detail Report Tables, Annual Average Indexes 2007 – 2013, Table 1A. Consumer Price Index for All Urban Consumers (CPI-U): U.S. city average, by expenditure category and commodity and service group (1982-84=100, unless otherwise noted), http://www.bls.gov/cpi/cpi_dr.htm.
1. The term “families” is used to refer to non-disabled children and adults.

 

Issue Brief Appendix: Data Sources and Methods

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