As payers of medical expenditures, federal and state governments and employ- ers are concerned about growing medical costs. State governments pay half the costs of caring for the medically indigent in their state, while the federal government pays the remaining half. Medicaid expenditures have gone up more rapidly than any other state expenditure and, to avoid raising taxes, caused states to reduce funding for other politically popular programs. At the federal level, the government is also responsible for Medicare (acute medical services for the aged). The hospital portion of Medicare is financed by a specific payroll tax that has been raised numerous times, and the physi- cian and prescription drug portions are financed with general income taxes. Medicare expenditures have also risen rapidly.
As a result of the Affordable Care Act (ACA), government subsidies have greatly increased to pay for expanded Medicaid eligibility and for those whose income is between 138 and 400 percent of the federal poverty level and who buy health insurance on healthcare exchanges.
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Government and Employer Concerns over Rising Medical Expenditures
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