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Means-Tested Transfer Programs in the United States

  • Economics
  • Medicine


Medicaid This PDF is a selection from a published volume from the National Bureau of Economic Research Volume Title: Means-Tested Transfer Programs in the United States Volume Author/Editor: Robert A. Moffitt, editor Volume Publisher: University of Chicago Press Volume ISBN: 0-226-53356-5 Volume URL: Conference Date: May 11-12, 2000 Publication Date: January 2003 Title: Medicaid Author: Jonathan Gruber URL: The largest growth in entitlement program spending in the United States over the past fifteen years has been in the Medicaid program, which pro- vides health insurance to low-income populations. In 1984, the Medicaid program spent $38 billion, which was 4.4 percent of the federal budget in that year and 0.97 percent of gross domestic product (GDP) and covered 22 million persons. By 2001, the program was projected to spend $219 bil- lion, which is 10.8 percent of the federal budget and 2.3 percent of GDP, and to cover 40 million persons. This astronomical growth is particularly striking in light of another important trend over the past fifteen years: a continued steady rise in the fraction of the nonelderly population without health insurance. From 1988 through 1998, this share rose by almost 20 percent, before leveling out in recent years (Employee Benefits Research Institute [EBRI] 2000). These facts raise a number of interesting and important questions about the purpose and structure of the third largest entitlement program in the United States (trailing only Social Security and Medicare). Medicaid is in fact really four public insurance programs in one. The first provides cover- age of most medical expenses for low-income women and children fami- lies; this function absorbs only about one-quarter of program dollars but encompasses two-thirds of program enrollees. The second is a program that provides public insurance for the portions of medical expenditures not covered by the Medicare prog

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