State Spending on Medicaid Compared with Other Expenditures

The Medicaid share of total state spending is expected to increase in FY 2014. This projection comes from the National Association of State Budget Officers (NASBO), whose annual State Expenditure Report analyzes and compares state spending in the following seven categories:

1. elementary and secondary education,
2. higher education,
3. public assistance,
4. Medicaid,
5. corrections,
6. transportation, and
7. “all other.”

The report for FY 2014 estimates spending in the Medicaid category, which includes state and federal funds, will comprise the largest portion of total state expenditures at 25.8%. In comparison, the elementary and secondary education category will comprise 19.5% of the total. The proportions shift, however when only state funds (i.e., general funds and other state funds, excluding bonds) are counted: the Medicaid share drops to 15.3% while the elementary and secondary education share increases to 24.2%.


The report also describes fluctuations in federal funds to states over the past few years. The winding down of federal funds dispersed through the American Recovery and Reinvestment Act (2009) and the expansion of Medicaid through the Affordable Care Act (2010) have led to shifts in the distribution of funding sources for state expenditures. A summary of the report is available here.