Medical benefits are largest source of government transfers in nonmetro and metro areas

A chart showing the government transfer payments to nonmetro areas, years 1978 to 2011.

Medical benefits are the single largest transfer payment category in both nonmetro and metro areas. In 1978, medical benefits accounted for 18.9 percent of all nonmetro transfer payments (the second largest category) and by 2011 these had risen to 41.7 percent (the largest category) of all nonmetro transfer payments. Similarly, in metro areas, medical benefits increased from 22.7 percent of all transfer payments in 1978 to 42.1 percent of payments in 2011. Overall, between 1978 and 2011, nonmetro transfer payments for medical benefits increased 581.5 percent, compared with 498.9 percent in metro areas. Some of the increase in transfer payments for medical benefits can be attributed to legislation expanding health insurance to children in working families through Medicaid and the Children's Health Insurance Program (CHIP). However, the rising cost of health care, which has far outpaced the overall rate of inflation, is a major source of this increase. This chart is from the Rural Poverty & Well-Being topic page on the ERS website, updated November 2012.

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