An analysis by The Pew Charitable Trusts found that healthcare spending consumed 31 percent of state and local government revenue in 2013, according to The New York Times.
Although this is almost twice as much as in 1987, Austin Frakt, PhD, a health economist, believes Medicaid is not causing the rise in healthcare spending.
Here are four things to know about Medicaid and healthcare spending, according to Dr. Frakt.
1. Medicaid is the cheapest source of coverage. Each adult enrollee costs about $3,200 per year, mostly covered by the government. Private insurance through an employer costs about $5,300 per year per adult. Medicaid spending growth has also been lower than that of Medicare since 1975, according to the Congressional Budget Office.
2. Much of the growth in state and local healthcare spending is due to healthcare benefits for public employees. Spending on public employee benefits increased 447 percent between 1987 and 2013, while Medicaid spending only increased 386 percent in the same period.
3. Spending on healthcare for state employees is also contributing to the overall increase. Healthcare spending for retired state employees and their beneficiaries increased 61 percent since 2009.
4. Increases in healthcare spending are limiting state and local spending for other services. The Pew Charitable Trusts believes over the next 40 years, spending on healthcare will surpass spending for all other government services. In Massachusetts between 2001 and 2014, government health spending grew 37 percent but spending for education and public safety declined 12 and 13 percent.