Subsidizing the Rich


Source: Mark Pauly and Thomas Grannerman, Medicaid Everyone Can Count On, American Enterprise Institute, February 2010.

Comments (14)

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  1. Tom H. says:

    Nice chart. I think Texas has about 12% of the nation’s poverty population and gets about 6% of federal Medicaid dollars. By contrast, New York has about 6% of the nation’s poor people and gets about 12% of federal Medcaid dollars. So we really are taking form the poor and giving to the rich.

  2. Stephen C. says:

    It’s not easy to eyeball this, but it does look like the states getting the most money are all high income states.

  3. Devon Herrick says:

    I suspect a significant chunk of spending in New York State is for the $50 billion per year Medicaid program. Keep in mind, Medicaid spending in New York isn’t really meant to help the poor. Rather, it’s an economic development engine / subsidy to the hospital industry and hospital employee unions.

  4. Linda Gorman says:

    The states getting the most money are those farthest along the left’s roadmap for health care reform which includes guaranteed issue/community rating for insurers, Medicaid expansion, managed care, and more and more government control of medical care via pay-for-performance and clinical pathways.

  5. Rust W. says:

    Linda makes an interesting observation. The states getting the most federal dollars are not only wealthy, they are also the most socialist — at least on health care issues.

  6. Brian Williams. says:

    The inefficient allocation of resoucres demonstrated by this map must drive (real) economists crazy.

  7. artk says:

    It’s amazing how you publish such a biased set of statistics without any analysis. Let’s compare Texas and New York in detail.

    The population of Texas is about 24,000,000 with 16.7% of the population living under the poverty line, or about 4,000,000. The total Medicaid enrollment for Texas is about 2,900,000. The population of New York is about 17,000,000 with a 14.2% of the population living under the poverty line, or about 2,400,000. The total Medicaid enrollment for New York is about 4,200,000. Now, Medicaid eligibility is supposed to be twice the poverty line. It’s obvious to me that Texas must make it much more difficult for Medicaid eligible people to enroll. Not inconceivable in a state that prides itself on having one of the highest uninsured rates in the country. If you look at Medicaid spending per person covered, I’m sure you’ll find the number are much closer.

    Since we’re on the topic of transfer payments, lets look at the ratio of federal taxes paid to total federal benefits received by state. My geography isn’t perfect, but its clear that three of the states in black are New York, New Jersey and Massachusetts. The ratio of federal benefits to federal taxes paid for those three states are .79, .61 and .82. So, in fact the “most socialist” states pay more then they receive. Now, lets look at three of the light colored state, who most of you think are the least socialist. Those are Texas, Mississippi and Georgia.
    For every dollar of federal taxes paid, they receive .94, 2.02 and 1.44. The only one that pays more in taxes they they receive in benefits is Texas, and by a smaller margin then the three dark colored states. So much for that theory.

  8. Robert says:

    What is included in “Federal Benefits Received by state?”

  9. artk says:

    Here’s the reference for federal expenditures vs taxes for each state. You will notice that the vast majority of the “Blue” states, the ones that most dislike federal spending, get considerably more federal dollars then they pay in taxes. Hating welfare doesn’t me you don’t love getting it.

  10. Robert says:

    “States with wealthier residents pay higher federal taxes per capita thanks to the progressive structure of the income tax. Other factors include whether states have powerful Members of Congress, the number of federal employees present in a state, and the number of residents receiving Social Security, Medicare and other federal entitlements.” Even the tax foundation link provided doesn’t equate there reports as being welfare spending only, but only total Federal Dollars.

    A place like New Mexico then with large government expeditures on Nuclear Research among other things, other states with many large Military bases, or even states with large federal ownership of land or national parks would not represent just welfare but total federal dollars, meaning unless we can see only what is paid out in Welfare dollars and then a definition of what welfare dollars are, assuming that all federal government payments are welfare would be inaccurate or purposefully misleading.

  11. artk says:

    Who mentioned welfare, money is money? A federal expenditure in a state benefits the economy of that state. If a state pays more then it receives, it’s a outflow to supports the states that collect more then they contribute. Our outflows for foreign oil may run out cars and enable Saudi potentates spend money on private 747s, but the outflow benefits the oil producer. The same goes for states. What’s the great federal program in Mississippi twice in federal expenditures what they pay in taxes?

  12. Robert says:

    “Hating welfare doesn’t me you don’t love getting it”
    You did.

  13. Robert says:

    Apparently Mississippi getting over on all of us!
    All I asked was what goes into the Federal Benefit computation. My only point was the expeditures are not just welfare – and that states that are getting money from the government may not be high users of welfare services. Therefore, state electorates that do not support government welfare programs may not be on them but are still receiving federal dollars which they cannot control. Many of these states might actually be fine with getting less money, if it meant getting more control of the state overall, like taking land back from the BLM, some I am sure are fine with “sticking it to the tax payers.”

  14. Linda Gorman says:


    Medicaid eligibility varies from state to state. According to the Kaiser Foundation, over 10% of New York Medicaid recipients have incomes above 300% of the FPL. In Texas, the number is 7.3%. You also fail to consider the number of illegal immigrants in each state–they are not supposed to be eligible for Medicaid but, especially before 2006, routinely enrolled. Many appeared to have switched to SCHIP after real ID went into effect. Numbers from the GAO in May, 2004, suggest that Texas had 1,041,000 illegal residents and that New York had 489,000.

    In short, your numbers say nothing about whether New York or Texas enrolls too many or too few Medicaid recipients.