As Annual Medicaid Spending Approaches $1 Trillion, How Much Of It Is Legitimate?

Medicaid is the joint federal/state program that provides free medical care to the poor and near-poor in the U.S.  Who could be against that?

A website called Statista collects data on various subjects of interest and presents them in useful charts.  One subject is the total federal plus state spending on the Medicaid program by year since inception of the program back in the 1960s through the latest year of 2024.  Here is that chart:

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Looking at the chart, a few things leap out.  One is rapid and unbroken growth year after year from the beginning up to the most recent year.  Another is two particularly rapid periods of growth, first in the 1990s (Bill Clinton was President), and then again in the most recent period of 2020-2024.  That last five-year period began in the last year of Trump’s first term (the pandemic year), but then continued throughout the four years of the Biden term.  Between the end of 2019 through 2024 the program grew from $627 billion to $949 billion.  That’s more than a 50% increase in 5 years, and more than an 8% compound annual rate of growth.  The word “unsustainable” doesn’t begin to describe it.

When you think of medical care for the poor, you likely have a mental picture of what all this money is paying for.  Probably, your mental picture involves hospitals, doctors, nurses, injuries, diseases, treatments and pharmaceuticals.  But how much of the Medicaid spending — and particularly of the recent explosion in Medicaid spending — falls in those categories?

We are recently learning that much or even most of the recent cost explosion falls into other categories that have come under the Medicaid spending umbrella by reason of various “waivers,” and that do not involve hospitals or doctors or medical professionals or medical treatments.  Major examples include:  in-home assistance, often provided by family members, for things like cooking and housekeeping; transportation to medical appointments; palliative end-of-life care, again often provided in the home (sometimes called “hospice”); autism counseling; and more.