States can opt out of Medicaid, but since 1982 every state has participated.
By law, they must offer specific benefit packages to certain groups, including poor pregnant women and young children. They are also free to go beyond those minimum standards.
Historically, lawmakers have considered it a bargain to go beyond because the federal government pays for so much of the program. So states from California to Maine have expanded Medicaid to cover working parents, lower-middle-class children and elderly citizens struggling to pay for the many services not funded by Medicare.
The result: Medicaid now covers 53 million Americans. The program pays the bills for nearly 60% of all nursing home residents and finances 37% of all births. Because most states have added prescription drug benefits, Medicaid covers the hefty pharmacy bills for many patients with AIDS, many transplant recipients and many senior citizens on dialysis or undergoing chemotherapy.
For most states, Medicaid expenses are often the single largest line item on the budget, exceeding K-12 education. States spending the most on Medicaid as a percentage of fiscal 2004 budgets:
Tennessee… 33.3%
Missouri …30.7
Pennsylvania …29.5
Maine …29.0
New York …28.3
Illinois… 28.1
Vermont …27.5
New Hampshire… 26.4
Mississippi… 26.3
Rhode Island …25.5
Sources: Health Management Associates; National Assn. of State Budget Officers; the Kaiser Commission on Medicaid and the Uninsured Times staff writer John-Thor Dahlburg in Miami contributed to this report.
