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Variation in Medicaid Spending Across Eligibility Groups

January 2018
Full report

When designing per capita caps in Medicaid, population groupings should recognize variation in healthcare needs and spending. Data from Elevance Health’s affiliated Medicaid plans shows that spending across six groups varied by a factor of 10, while spending across 16 detailed groups varied by a factor of 34.

Medicaid is an important source of health insurance coverage, serving one in five Americans. Recently, policymakers considered financing reforms that would cap federal spending on a per-beneficiary basis, known as per capita caps. These caps would be set in the aggregate, based on spending among defined eligibility groups.

As policymakers debate Medicaid financing reforms, it is important to understand Medicaid spending today and how expenditures vary across and within eligibility groups. Variation in spending is indicative of the diverse set of healthcare needs among the Medicaid population, from well-child preventive care to management of chronic conditions to long-term care.


  • Medicaid financing reform
  • Analysis of spending variation among members in Elevance Health’s affiliated plans
  • Implications of findings for Medicaid reform

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Continuity of Medicaid Coverage Improves Outcomes for Beneficiaries and States
June 2018
Continuous coverage improves beneficiaries’ health, lowers spending per person, and eases administrative burden for states. Those with disruptions are likelier to have unmet medical needs.
Profile of the Medicaid Expansion Population: Demographics, Enrollment, and Utilization
January 2018
The study showed costs grew steadily over time while enrollees’ health needs shifted from acute to chronic care. Drug spending per person became the largest share of spending by month eight.