State Health Care Spending

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Why State Health Care Spending Matters

When it comes to health care spending, the bill just keeps getting bigger. Health care’s growing claim on state budgets is competing with other important priorities, including education, public safety, and transportation.

States felt this acutely during the Great Recession, when the number of people on Medicaid expanded dramatically. Medicaid is now the top budget item for states, comprising more than 22 percent of their total spending in fiscal year 2010, and that figure is projected to rise in coming years. Many states will spend more money on Medicaid as that program begins to expand in 2014 under the Affordable Care Act (ACA)—and that amount will grow in 2017, when federal funds begin to taper.

The implementation of ACA has heightened the focus on Medicaid. But states have many other health care costs—such as public sector employee and retiree benefits , and corrections—that account for a significant share of their overall health care spending. These, too, will likely escalate. Containing all of these costs in ways that deliver better outcomes will be critical to states’ fiscal health now and in the future.

How We Conduct Our Work

The State Health Care Spending Project conducts original research and works with experts in the field to help states understand how much they spend on health care overall, how that amount has changed over time, what is driving it higher, and which policy approaches are containing costs while improving health outcomes. Our rigorous, nonpartisan 50-state data and analysis enable stakeholders to compare and contrast states’ experiences, and our case studies showcase innovative efforts to manage costs.

Project Partners

The State Health Care Spending Project is an initiative of The Pew Charitable Trusts and the John D. and Catherine T. MacArthur Foundation.

Media Contact

Jeremy Ratner

Director, Communications