This study was conducted to estimate the future government budget in medical expenditures using for the low-income handicapped, because medical expenditures to the low-income handicapped is escalating in these days. It became a big problem not only to the central-government but also to the district-government because they have to subsidize a part of co-payment. This study was designed to project the future government budget using structural model. For the short-term projection, the structural model is stronger than the regression model. The data used for this study were the population projection data based on National Census Data(2000) of the National Statistical Office, the data of Ministry of Health & Welfare, and the data of National Health Insurance Corporation from November 2m to June 2001. The results of the study are summarized as follows: The future government budget in medical expenditures using to the low-income handicapped will be 15-18 billion Won in the year 2003, 16-23 billion Won in 2004, 18-30 billion Won in 2005, 19-38 billion Won in 2006 and 21-49 billion Won in 2007. It is predicted that they would be increasing rapidly. Therefore, the government budget in medical expenditures using for the low-income handicapped must be enlarged.