Healthcare spending by states and localities grew by 8 percent in 2012, significantly outpacing the total
In 2012, healthcare spending consumed a larger share of revenue (approximately $3 out of every $10) for states and localities than it had in any other year since 1987, the first year for which complete spending information is available, according to the report, which is based on CMS data. Healthcare spending as a share of revenue for state and local governments reached 31 percent in 2012, compared with 16 percent in 1987. Additionally, adjusted for inflation, combined health expenditures for states and localities increased 260 percent during the same time period.
State and local government health spending grew at a significantly slower rate (2 percent) from 2008 to 2010. However, this slowdown was due to a temporary surge in federal Medicaid funding rather than a shift in long-term trends, according to the report. The American Recovery and Reinvestment Act of 2009 and legislation that later extended provisions of the law led to the federal government distributing an extra $103 billion in Medicaid funds, with states receiving most of that amount in 2009 and 2010.
From 2012 to 2022, CMS has projected state and local government healthcare spending will increase by 49 percent in inflation-adjusted dollars, according to the report. Similarly, the Government Accountability Office has identified healthcare spending as a primary long-term fiscal concern for state and local governments: Expenditures for these entities are expected to almost double as a percentage of gross domestic product from 2014 to 2060.
Pew plans to conduct further research and analysis concerning state healthcare spending trends for Medicaid and public employee health insurance premiums, among other categories, according to the report.
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