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The US Medicaid ProgramCoverage, Financing, Reforms, and Implications for Health Equity

To identify the key insights or developments described in this article
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Key Points

Question  Who does Medicaid insure, how is the program financed and delivered, how have policies evolved, and how could reforms address racial and ethnic health equity?

Findings  In 2022, Medicaid insured approximately 80.6 million individuals (56.4% from racial and ethnic minority groups in 2019). In 2020, estimated Medicaid spending was $671.2 billion (16.3% of total US health spending). The proportion of beneficiaries enrolled in Medicaid managed care was 69.5% in 2019, 45 states have pursued 139 Medicaid delivery system reforms from 2003 to 2019, and 38 states and Washington, DC, have expanded Medicaid under the Affordable Care Act. Racial and ethnic health disparities are common within Medicaid, and evidence on the association of Medicaid policies and reforms with achieving racial health equity remains limited.

Meaning  Medicaid is an important source of insurance and accounts for substantial health care spending. Medicaid reforms have expanded coverage and provide further opportunities to reduce disparities and address health inequities.

Abstract

Importance  Medicaid is the largest health insurance program by enrollment in the US and has an important role in financing care for eligible low-income adults, children, pregnant persons, older adults, people with disabilities, and people from racial and ethnic minority groups. Medicaid has evolved with policy reform and expansion under the Affordable Care Act and is at a crossroads in balancing its role in addressing health disparities and health inequities against fiscal and political pressures to limit spending.

Objective  To describe Medicaid eligibility, enrollment, and spending and to examine areas of Medicaid policy, including managed care, payment, and delivery system reforms; Medicaid expansion; racial and ethnic health disparities; and the potential to achieve health equity.

Evidence Review  Analyses of publicly available data reported from 2010 to 2022 on Medicaid enrollment and program expenditures were performed to describe the structure and financing of Medicaid and characteristics of Medicaid enrollees. A search of PubMed for peer-reviewed literature and online reports from nonprofit and government organizations was conducted between August 1, 2021, and February 1, 2022, to review evidence on Medicaid managed care, delivery system reforms, expansion, and health disparities. Peer-reviewed articles and reports published between January 2003 and February 2022 were included.

Findings  Medicaid covered approximately 80.6 million people (mean per month) in 2022 (24.2% of the US population) and accounted for an estimated $671.2 billion in health spending in 2020, representing 16.3% of US health spending. Medicaid accounted for an estimated 27.2% of total state spending and 7.6% of total federal expenditures in 2021. States enrolled 69.5% of Medicaid beneficiaries in managed care plans in 2019 and adopted 139 delivery system reforms from 2003 to 2019. The 38 states (and Washington, DC) that expanded Medicaid under the Affordable Care Act experienced gains in coverage, increased federal revenues, and improvements in health care access and some health outcomes. Approximately 56.4% of Medicaid beneficiaries were from racial and ethnic minority groups in 2019, and disparities in access, quality, and outcomes are common among these groups within Medicaid. Expanding Medicaid, addressing disparities within Medicaid, and having an explicit focus on equity in managed care and delivery system reforms may represent opportunities for Medicaid to advance health equity.

Conclusions and Relevance  Medicaid insures a substantial portion of the US population, accounts for a significant amount of total health spending and state expenditures, and has evolved with delivery system reforms, increased managed care enrollment, and state expansions. Additional Medicaid policy reforms are needed to reduce health disparities by race and ethnicity and to help achieve equity in access, quality, and outcomes.

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Article Information

Corresponding Author: Julie M. Donohue, PhD, Department of Health Policy and Management, University of Pittsburgh School of Public Health, 130 DeSoto St, Pittsburgh, PA 15261 (jdonohue@pitt.edu).

Accepted for Publication: August 5, 2022.

Author Contributions: Drs Roberts and Cole had full access to all of the data in the study and take responsibility for the integrity of the data and the accuracy of the data analysis.

Concept and design: All authors.

Acquisition, analysis, or interpretation of data: Donohue, Cole, Jarlenski, Roberts.

Drafting of the manuscript: Donohue, Cole, Jarlenski, Michener, Roberts.

Critical revision of the manuscript for important intellectual content: Cole, James, Jarlenski, Michener, Roberts.

Statistical analysis: Roberts.

Administrative, technical, or material support: All authors.

Supervision: Donohue.

Conflict of Interest Disclosures: Dr Donohue reported receiving grants from the Pennsylvania Department of Human Services, which administers the Pennsylvania Medicaid program, outside the submitted work. Dr Cole reported receiving grants from the Pennsylvania Department of Human Services and compensation for independent consulting services from AcademyHealth outside the submitted work. Dr Jarlenski reported receiving grants from Pennsylvania Department of Human Services and the Pennsylvania Department of Health related to health equity research outside the submitted work. Dr Michener reported receiving grants from the Robert Wood Johnson Foundation and the Commonwealth Fund during the conduct of the study and outside the submitted work. Dr Roberts reported receiving grants from the Agency for Healthcare Research and Quality (No. K01HS026727) and Arnold Ventures during the conduct of the study. No other disclosures were reported.

Disclaimer: The views expressed are the authors’ own and should not be attributed to the Pennsylvania Department of Human Services or other funding sources disclosed by the authors.

Additional Contributions: Research assistance was provided by Anna Patterson, MPH, RN, Alexandra Glynn, BA, and Stefanie Junker, MPH, from the University of Pittsburgh School of Public Health and helpful comments from K. John McConnell, PhD, Oregon Health & Science University. These Individuals were not compensated for their roles.

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