A Healthy Blog

Massachusetts health care — wonky, with a healthy dose of reality

Another Way of Looking at Medicaid -- US and MA

Another Way of Looking at Medicaid -- US and MA

June 26, 2005

The nation's governors are on the warpath about Medicaid, looking for ways to cut and trim, and complaining that Medicaid consumes on average 22% of state budgets on average. The Congressional Research Service has just released a report that provides a more honest way of understanding the impact of Medicaid on state budgets. Because more than half of Medicaid is financed with federal dollars, the real state tax hit from Medicaid is far less than that amount -- about 12.7% in FY2004. Also of interest is how Massachusetts stacks up among states with the highest Medicaid hit on state tax dollars. Here's the list:
Ohio -- 25.2%
Tennessee -- 20.4%
Connecticut -- 19.8%
Pennsylvania -- 19.2%
New Hampshire -- 18.9%
Illinois -- 17.8%
Missouri -- 17.1%
Rhode Island -- 15.1%
New York -- 14.4%
Vermont -- 13.9%
Texas -- 13.8%
Florida -- 13.0%
New Jersey -- 12.9%
Michigan -- 12.9%
Maine -- 12.5%
Colorado -- 12.5%
Nevada -- 12.5%
Minnesota -- 12.4%
Massachusetts -- 12.2%
National Average -- 12.7%

Yahoo, we're #19! OK, let's put this in some context. Other states are so low because they spend so little on much of anything -- hello Texas! But that's not the whole story. Truth is: we're not way out there in Massachusetts on Medicaid spending as a portion of how state tax dollars are used. Not by a mile.