Medicaid

America's Medicaid Problem

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Medicaid spending as a percentage of GDP

Medicaid's advocates like to argue that when it comes to publicly funded health programs, Medicaid is not only the cheapest, but the best at holding down costs. But the reality is that for decades the program has eaten up an ever-larger share of America's total economic output. That's not sustainable. 

The other thing to note from this graph is that the federal commitment relative to GDP has increased faster than the state commitment. Indeed, over the last few years, the combined state commitment has actually decreased slightly as a percentage of GDP (although it's worth noting that if you look at the actual spending figures the total dollar commitment of state and local governments has continued to rise). There are any number of possible explanations for this, but here's one worth considering: States have become better at gaming the system controlling federal matching funds. This also suggests why federal block grants are so appealing from a federal perspective. As it stands, states have an incentive to extract ever-more federal funds during economic good times. Dropping the matching-funds system for a federally allocated block grant would go a long way toward holding the federal commitment in check.  

Much more on Medicaid here, here, and here

NEXT: Dawn of a New Red

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  1. Why do countries with socialized medicine spend so much less than the U.S. and get better health outcomes?

    1. Why do people pussyfoot around this issue? It is all about end of life care. If two people have the same terminal illness, and one gets $100,000 dollars worth of care, and lives 3 more months then the person who was told to go home and die, which was the “better health outcome”?

      1. So many dying old farts, so few ice floes.

        1. Not advocating. Just sayin’.

          1. And you are correct.

    2. >>Why do countries with socialized medicine spend so much less than the U.S. and get better health outcomes?

      Guess we’d need some cites on the “better health outcomes” deal before we could adequately discuss the question. And, please, I beg you, none on the infant mortality canard.

    3. Because their people are not so fucking obese?

    4. And yet U.S. citizens are living longer than ever before and the rate of newborn death is lower.

      Huh.

    5. Why do Americans who love socialized medicine live in America if we are so inferior. Just because your ancestors came here doesn’t mean you have to stay. Europe is better than it once was, right? Where is the mass exodus back to the homeland?

    6. Max|3.16.11 @ 3:40PM|#
      “Lies posed as question”

      Thanks, max, you’re good at that.

  2. for decades the program has eaten up an ever-larger share of America’s total economic output. That’s not sustainable.

    Ha! It is if it approaches asymptotically!

  3. States have become better at gaming the system controlling federal matching funds.

    Yes, indeedy. In the last couple of years, Texas has figured out how to squeeze an extra billion or so out of the feds without increasing eligibility or utilization.

    Thanks, Blue State taxpayers!

    1. You’re welcome.

      (takes aim at Chuck Schumer dart board)

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