U.S. Medicaid's long-term spending growth came mainly from broader enrollment, two Cleveland Fed researchers found, a pattern that contrasts with 2024, when coverage shrank but the program's costs rose.
From 1990 through 2024, spending per U.S. resident quadrupled as enrollment relative to the population rose nearly 200%, Cleveland Fed Research Analyst James Hamlette and Economic and Policy Advisor Karen Kopecky wrote in an Oct. 13 analysis. Spending per enrollee increased 42% over the same period.
More recent federal figures show a different pressure on costs. The Centers for Medicare & Medicaid Services (CMS) said Medicaid enrollment dropped by 7.9 million people, or 8.6%, to 84.3 million in 2024 as states resumed eligibility reviews after pandemic-era coverage provisions ended. Calendar-year Medicaid spending still rose 6.6% to $931.7 billion, representing 18% of U.S. health spending.
CMS said spending per enrollee increased 16.6% in 2024, largely because younger, healthier people accounted for much of the enrollment decline. Higher provider rates and payments that states direct to providers also contributed.
Policy changes help explain the longer trend. The Affordable Care Act allowed states to expand Medicaid eligibility to adults younger than 65 whose household incomes did not exceed 138% of the federal poverty level. Hamlette and Kopecky found that nondisabled working adults led enrollment growth from 2013 through 2024.
The groups receiving coverage account for different shares of program spending. Nondisabled adults ages 19 to 64 were 45% of Medicaid enrollees in 2023 and accounted for 34.2% of spending, the researchers found. People eligible because of disability accounted for 28.9% of spending, while those 65 or older accounted for 21.3%; each group represented less than 9% of enrollees.
Medicaid is funded by federal and state governments. Federal funds covered 64.7% of its benefit spending in fiscal 2024, the Medicaid and CHIP Payment and Access Commission (MACPAC) reported. In a separate measure that combines Medicaid with the Children's Health Insurance Program (CHIP), MACPAC counted 78.0 million enrollees in July 2025, down 2.8% from a year earlier.
Arkansas's earlier work requirement offers a precedent. A 2019 New England Journal of Medicine study found that insurance coverage declined during the first six months of the state's 2018 policy, while employment showed no significant change.
A new federal community engagement requirement covers certain nonpregnant adults ages 19 to 64 who are neither entitled to nor enrolled in Medicare and qualify through Medicaid's adult group or specified Section 1115 programs. Covered adults generally must meet 80 hours a month of qualifying activity or attend an educational program at least half-time, unless exempt. States must verify compliance and may seek proof from individuals when they cannot confirm it; they generally must implement the requirement by Jan. 1, 2027.
