Among Medicaid- Only Enrollees, a Small Percentage Consistently Accounted for a Large Percentage of Expenditures

A small percentage of Medicaid-only enrollees consistently accounted for  a large percentage of total Medicaid expenditures for Medicaid-only  enrollees. In each fiscal year from 2009 through 2011,  the most expensive 1 percent of Medicaid-only enrollees in the nation  accounted for about one-quarter of the expenditures for Medicaid-only  enrollees;  the most expensive 5 percent accounted for almost half of the  expenditures;  the most expensive 25 percent accounted for more than three- quarters of the expenditures;  in contrast, the least expensive 50 percent accounted for less than   8 percent of the expenditures; and about 12 percent of enrollees had no expenditures. For some states,  such as Tennessee and Hawaii, a high percentage of expenditures were  for managed care or premium assistance, and correspondingly low  percentages were for expenditures such as hospital care or acute care  services. States vary widely in the distribution of their expenditures among service  categories; for state-by-state information about the percentage of high- expenditure Medicaid-only enrollees’ expenditures for selected categories  of services in fiscal year 2011, see appendix V.

	Agency Comments

HHS reviewed a draft of this report and provided technical comments,  which we incorporated as appropriate. These  objectives were to: (1) examine the distribution of expenditures among  Medicaid-only enrollees, (2) determine whether the proportions of high- expenditure Medicaid-only enrollees in selected categories changed or  remained consistent from year to year, and (3) determine whether the  distribution of high-expenditure Medicaid-only enrollees’ expenditures  among selected categories of service varied across states. We analyzed data from the Medicaid Statistical Information System  (MSIS) Annual Person Summary File. We used data from fiscal years 2009, 2010, and 2011—the most recent  years for which data from almost all states were available. Appendix II: Distribution of Expenditures among Medicaid-Only Enrollees, Fiscal Year 2011

Table 4 provides information about the distribution of expenditures among  Medicaid-only enrollees nationally and in each state and the District of  Columbia in fiscal year 2011, including  the percentages of expenditures for Medicaid-only enrollees that were  attributable to the most expensive 1, 5, 10, and 25 percent of these  enrollees;  the percentage of expenditures for Medicaid-only enrollees that were  attributable to the least expensive 50 percent of these enrollees  (including those with 0 expenditures); and  the Gini coefficient, which indicates the degree of inequality; that is,  the extent to which the frequency distribution differs from one in which  expenditures are equal for all enrollees.
Why GAO Did This Study

Studies on healthcare spending generally find that a small percentage of individuals account for a large proportion of expenditures, and Medicaid—a federal-state health financing program for low-income and medically needy individuals—is no exception. Medicaid expenditures for fiscal year 2013 totaled about $460 billion, covering about 72 million enrollees, some of whom were also eligible for Medicare. More information about Medicaid enrollees who are not also eligible for Medicare (i.e., Medicaid-only enrollees) and who account for a high proportion of expenditures could enhance efforts to manage expenditures and facilitate improvements to care.
GAO was asked to provide information about the characteristics of high-expenditure Medicaid-only enrollees and their expenditures. GAO (1) examined the distribution of expenditures among Medicaid-only enrollees, (2) determined whether the proportions of high-expenditure Medicaid-only enrollees in selected categories changed or remained consistent from year to year, and (3) determined whether the distribution of high-expenditure Medicaid-only enrollees' expenditures among selected categories of service varied across states.
GAO analyzed data from the Medicaid Statistical Information System Annual Person Summary File for fiscal years 2009, 2010, and 2011, the most recent years for which data from almost all states were available.

What GAO Found

A small percentage of Medicaid-only enrollees—that is, those who were not also eligible for Medicare—consistently accounted for a large percentage of total Medicaid expenditures for Medicaid-only enrollees. In each fiscal year from 2009 through 2011, the most expensive 5 percent of Medicaid-only enrollees accounted for almost half of the expenditures for all Medicaid-only enrollees. In contrast, the least expensive 50 percent of Medicaid-only enrollees accounted for less than 8 percent of the expenditures for these enrollees.
Of the Medicaid-only enrollees who were among the 5 percent with the highest expenditures within each state, the nationwide proportions of these enrollees in different eligibility groups (such as the disabled or children) and with certain conditions (such as asthma) or services (such as childbirth or delivery) were also consistent from fiscal years 2009 through 2011.
The distribution of high-expenditure Medicaid-only enrollees' expenditures among categories of service in fiscal year 2011 varied widely across states. Expenditures for managed care and premium assistance varied most widely (from 0 to 75 percent).
The Department of Health and Human Services provided technical comments on a draft of this report, which were incorporated as appropriate.