Blog: Small group of Medicaid patients account for a large part of program costs

The most expensive 5% of Medicaid beneficiaries nationally accounted for nearly half of program spending from 2009 to 2011, the Government Accountability Office reports.

The new GAO study did not include people who are dually eligible for Medicaid and Medicare, who are some of the most expensive patients in the program. The study shows that there is another group of very expensive Medicaid patients besides dual eligibles.

“Studies on healthcare spending generally find that a small percentage of individuals account for a large proportion of expenditures, and Medicaid…is no exception,” the report said.

The most expensive 1% of Medicaid-only enrollees accounted for about one-quarter of the expenditures for Medicaid-only enrollees. The most expensive 5% accounted for almost half of the expenditures. The most expensive 25% accounted for more than three quarters of the expenditures.

On the opposite end, the least expensive 50% accounted for less than 8% of the expenditures. About 12% had no expenditures.

The GAO provided limited insight into the characteristics of the most expensive 5% of beneficiaries. It found that disabled enrollees were disproportionately represented in the high-expenditure group, consistently constituting about 64% of those with the highest expenditures. Children who compose nearly 50% of Medicaid-only enrollees, consistently constituted about 16% of the high-expenditure group.

Less than 15% of all Medicaid-only enrollees had mental health conditions, but enrollees with mental health conditions consistently constituted about half of the high-expenditure group in each year. About 3% percent of all Medicaid-only enrollees had diabetes, but enrollees with diabetes consistently constituted nearly 20% of the high-expenditure group in each year.

Medicaid had about 72 million enrollees in 2013, with expenditures totaling about $460 billion in fiscal year 2013.