For state-by-state data please see the tables below.
The state share of Medicaid spending
Medicaid is funded by a combination of state and federal funds.34 In 2012, states spent $181 billion of their own funds on Medicaid. State spending on Medicaid is second only to spending on primary and secondary education, which cost states $270 billion nationwide.35
To put the state share of Medicaid spending in context, states spent 16 percent of their state-generated funds on Medicaid. State-generated funds—or own-source revenue—are funds that states raise on their own, primarily through taxes and fees, and do not include any federal revenue, such as matching dollars or grants.36,*
The proportion of states' own-source revenue spent on Medicaid varies greatly, from 5 percent in North Dakota to 26 percent in New York. This variation is attributable not only to state Medicaid policy decisions—the breadth of health care services covered, eligible populations, and provider payment rates—but also tax and other policy decisions that determine states' revenues.37
Variation is also driven by factors outside of policymakers' control, such as state economic performance, demographics, state resident health status, and regional differences in the cost of providing health care services.38
As a percentage of own-source revenue, New York's and Massachusetts' Medicaid spending is among the highest in the nation. These states also have among the highest Medicaid enrollments—at least 25 percent of their populations—relatively generous benefit packages, very high costs of health care services, and the minimum federal matching rates (50 percent).39 In contrast, North Dakota and Alaska have the country's highest own- source revenue per resident, largely due to energy-related income, which makes Medicaid spending a smaller portion of the states' revenues.40
