Posting date: January 26, 2005

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Health Affairs, 10.1377/hlthaff.w5.52
Copyright © 2005 by Project HOPE

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Understanding The Recent Growth In Medicaid Spending, 2000-2003

¹ John Holahan directs the Urban Institute’s Health Policy Center in Washington, D.C.
² Arunabh Ghosh is a research assistant at the center.

^*Corresponding author.

Abstract

Growth in Medicaid spending averaged 10.2 percent per year between 2000 and 2003, resulting in a one-third increase in program spending. Spending growth was lower from 2002 to 2003 because of slower growth in enrollment and in spending per enrollee, particularly for acute care services, and declines in disproportionate-share hospital (DSH) payments and upper payment limit (UPL) programs. For the entire 2000-2003 period, Medicaid spending increases were largely driven by enrollment growth, much of which was attributable to the economic downturn. Increases in spending per enrollee over the period were faster than inflation but slower than increases in private insurance spending.

Key Words: Business Of Health, Consumer Issues, Managed Care - Medicaid, Medicaid, State/Local Issues, Health Spending

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