Minnesota spent $57,388 per Medicaid enrollee with disabilities in 2023, the highest level in the entire country, according to a new analysis published June 2, 2026, by the Center of the American Experiment. The state also ranked third-highest nationally for overall Medicaid spending per enrollee at $12,982, trailing only Pennsylvania and Washington. The report raises urgent questions about whether Minnesota can sustain this trajectory as health spending threatens to crowd out other state budget priorities.
The spending gap between Minnesota and other states is dramatic. The median state spent $26,566 per disability enrollee — less than half of Minnesota's level. Minnesota spent over $9,000 more than Washington, the second-highest state, and nearly $16,000 more than New York, which ranked third. For long-term care waivers specifically, 80 percent of which support disability programs, spending could reach $88,818 per person in 2026 — a 25 percent increase from 2023 levels. Even after a slight dip, the report projects spending in 2027 and 2028 will remain 22 percent higher than in 2023. Between 2024 and 2029, Health and Human Services accounts for 38 percent of all general fund dollars by the end of that period, nearly matching E-12 Education, the state's top expenditure category.
The report finds that rapid growth in long-term care spending stems from legislative efforts to address worker shortages by raising wages. Starting in 2024, growth accelerated sharply after the 2023 DFL-controlled legislature not only raised baseline spending levels but changed inflation adjustment formulas, speeding up future increases. According to the analysis, "for every $100 increase in Minnesota's budget between 2024 and 2029, a full $50 is allocated to HHS." While in 2023 the Department of Human Services' budget equaled three-quarters of E-12 Education spending, by 2029 it's projected to reach 86 percent of the education budget. The report notes that even after $300 million in anti-fraud spending cuts enacted in the 2026 session, HHS remains "the primary driver of state budget growth."
The report argues that this spending trajectory creates a fundamental fiscal problem, even though the federal government covers over half of all Human Services spending. HHS's rapid expansion has "monopolized the state budget, leaving little to no room for other essential public services," the authors write. A persistent structural deficit limits Minnesota's ability to absorb additional Medicaid spending without either cutting other programs like roads or raising taxes. The analysis also questions whether worker shortages truly justify the increases, pointing to "rampant fraud plaguing high-risk programs like Personal Care Assistance" and noting that long-term care worker shortages are a nationwide problem, not unique to Minnesota.
The report concludes that policymakers must directly confront fast-growing programs like disability waivers, "which will likely mean addressing the staggering $57,000 per-enrollee price tag." The bottom line is blunt: "Minnesota cannot afford its current system. Restoring fiscal sustainability will require the state to bring its spending in line and move down the national rankings."