Medicare Compliance & Reimbursement

Do generous Medicaid benefits play a role?

Someone living in the Northeast spends about $1,000 more per year on health care than the national average, and about $2,000 more than folks living in some Western states, reports a Centers for Medicare & Medicaid Services (CMS) study published in Health Affairs.

Compared to the $5,283 per capita average, folks in Massachusetts, Maine, New York, Connecticut, Delaware, Rhode Island, Vermont, West Virginia and Pennsylvania spent $6,346 per capita in 2004.

"There is no one clear explanation, but there are several similar characteristics among these states," says report co-author Anne Martin, an economist with the CMS Office of the Actuary.

For instance, some Northeasterners are wealthier than the national average: Four states on the list (MA, NY, CT, DE) had high per capita personal income.

More Northeasterners are also more likely to be insured--and there are more doctors to go to:  Six states (MA, NY, CT, RI, VT and PA) have the highest concentration of physicians in the population and the lowest percentage of uninsured people.

Generous Medicaid benefits could also contribute to higher per capita health care spending: Medicaid enrollees in Massachusetts spent an average of $9,150, and enrollees in New York spent $10,173. In fact, Medicaid accounted for nearly 32 percent of New York's health care spending in 2004. But the number of people enrolled in Medicaid doesn't affect spending levels, the report noted.

Utah, Arizona, Idaho, New Mexico and Nevada spent less than the national average--$4,244 per person in 2004. Lower-than-average per enrollee Medicare and Medicaid spending and less access to physicians and hospitals in rural areas are contributing factors.

The report also noted that spending on prescription drugs grew faster during 1998-2004 than in 1991-1998.

To read the full September 18 report, go to www.healthaffairs.org, and click the link that reads "CMS: New York, Mideast region spend most on health care."