Trends in Medicaid Administrative Expenditures During the COVID-19 Public Health Emergency

BackgroundMedicaid administrative spending funds core program operations such as fraud and waste detection and prevention, technological infrastructure, and eligibility determination. Though typically lower than private insurance administrative costs, such spending varies across states and may respond to policy and economic shocks.PurposeThis study examined trends in Medicaid administrative expenditures before and during the federal maintenance of effort (MOE) policy enacted during the COVID-19 Public Health Emergency (PHE).MethodsUsing state-level panel data from 2018-2022 for all 50 states and the District of Columbia, we regressed Medicaid administrative spending outcomes (percent changes in dollar amount, per-enrollee, and per capita spending) on a binary indicator for MOE period and controlled for unemployment rates, enrollment changes, and managed care characteristics using linear regression models with state fixed effects. We also estimated models stratified by administrative burden tertiles.ResultsPercent change in Medicaid administrative spending (amount in United States dollars) remained stable during the MOE period relative to pre-MOE years. Per-enrollee administrative spending declined by 9.1 percentage points.ConclusionsDespite record enrollment under MOE policies, Medicaid administrative spending did not significantly increase. The findings suggest that states maintained administrative cost stability, potentially achieving economies of scale, and that administrative burden levels and other time varying state characteristics did not meaningfully influence these trends.