New data from 2024 shows that Medicaid spending continued to soar despite enrollment declining following the end of COVID-era continuous coverage requirements. This pattern is consistent with a program where spending is disconnected from serving enrollees, with prevalent waste, fraud, and abuse.
This Paragon PIC draws from the recent release of the 2024 National Health Expenditure Accounts (NHEA) data, the official government estimates of health care spending in the United States. Total Medicaid expenditures (federal and state shares combined) grew from $874 billion in 2023 to $932 billion in 2024—an increase of 6.6 percent. This surge in spending occurred despite a drop in enrollment of about 8 million people as states restarted eligibility verifications and removed ineligible individuals from the rolls. This divergence drove per-enrollee spending up by 16.6 percent in a single year—the fastest growth since at least the 1980s and more than five times the rate of overall inflation.
This latest data confirms what Paragon has long warned: Medicaid’s trajectory is unsustainable. The program’s structural flaws, including open-ended federal reimbursement of state spending, lax eligibility verification, corporate welfare through an increase in state-directed payments, and state financing gimmicks, are key contributors to the spending escalation.
Policymakers have taken important steps to address these problems. The One Big Beautiful Bill (OBBB), enacted in July 2025, includes provisions to curb wasteful spending, reduce welfare dependency, trim corporate welfare in the program, and improve state incentives to manage Medicaid funds responsibly. Because the data shown here covers the 2024 calendar year, it captures the spending crisis prior to the OBBB, rather than the impact of the OBBB’s reforms. As the key OBBB reforms take effect over the next few years, we expect future data to begin reflecting the bill’s progress in stabilizing Medicaid’s finances and reducing waste, fraud, and abuse in the program.
