Why State Health Care Spending Matters
When it comes to health care spending, the bill just keeps getting bigger. Health care’s growing claim on state budgets is competing with other important priorities, including education, public safety, and transportation.
States felt this acutely during the Great Recession, when the number of people on Medicaid expanded dramatically. Medicaid is now the top budget item for states, comprising more than 22 percent of their total spending in fiscal year 2010, and that figure is projected to rise in coming years. Many states will spend more money on Medicaid as the Affordable Care Act (ACA) begins to expand in 2014—and that amount will grow in 2019, when federal funds begin to taper.
The implementation of ACA has heightened the focus on Medicaid. But states have many other health care costs—such as public sector employee and retiree benefits, public health, state-run hospitals, and corrections—that account for a significant share of their overall health care spending. These, too, will likely escalate. Containing all of these costs in ways that deliver better outcomes will be critical to states’ fiscal health now and in the future.
How We Conduct Our Work
The LATEST from the Project
A number of the nation’s key cities face unpaid bills for the retirement benefits they have promised their employees. This report examines pension and retiree health care funding in 61 cities—the most populous one in each state plus all others with populations over 500,000—and looks at options for reform.
Sixty-one key cities across America have emerged from the Great Recession with a gap of more than $217 billion between what they had promised their workers in pensions and retiree health care and what they had saved to pay that bill, according to a report released today by The Pew Charitable Trusts. more
Experts from Pew and the MacArthur Foundation explain why states are seeking to better understand state health care costs and how the State Health Care Spending Project will find and share the answers. more
The gap between the promises states have made for public employees’ retirement benefits and the money they have set aside to pay these bills was at least $1.38 trillion in fiscal year 2010, according to Pew's latest comprehensive analysis on pension and retiree health care funding. more
The gap between the promises states have made for public employees’ retirement benefits and the money set aside to pay for them grew to at least $1.26 trillion in fiscal year 2009—a 26 percent increase in one year—according to a Pew report.more