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Centers for Medicare and Medicaid Services logo

Centers for Medicare and Medicaid Services (Medicaid administrator) logo

Medicaid is the United States health program for eligible individuals and families with low incomes and resources. It is a means-tested program that is jointly funded by the states and federal government, and is managed by the states.[1] Among the groups of people served by Medicaid are eligible low-income parents, children, seniors, and people with disabilities. Being poor, or even very poor, does not necessarily qualify an individual for Medicaid.[2] Indeed, it is estimated that approximately 60 percent of poor Americans are not covered by Medicaid.[3] Medicaid is the largest source of funding for medical and health-related services for people with limited income in the US.

History and participation Edit




Another service in the Social Security program under Medicaid are dental services. These dental services are an optional service for adults above the age of 21; however, this service is a requirement for those eligible for Medicaid and below the age of 21.[4] Dental services must be given in order to meet standards of dental practice. These standards should be determined by the state, following discussion regarding the health of the child. Minimum services should include pain relief, restoration of teeth and maintenance for dental health. EPSDT individuals below the age of 21 are not to be limited emergency services. Oral Screenings are not required for EPSDT recipients and they do not suffice as a direct dental referral. If a condition requiring treatment is discovered during an oral screening, the state is responsible for taking care of this service, regardless if it is covered on that particular Medicaid plan. [5]

Early and Periodic Screening, Diagnostic and Treatment (EPSDT) is a mandatory Medicaid program for children that aims to focus on prevention on early diagnosis and treatment of medical conditions.[4]

The Medicaid Drug Rebate Program was created by the Omnibus Reconciliation Act of 1990. This act helped to add Section 1927 to the Social Security Act of 1935 which became effective on January 1, 1991. This program was formed due to the costs that Medicaid programs were paying for outpatient drugs at their discounted prices. [6]

The Veteran's Health Care Act of 1992 (VHCA) became active on November 4, 1992 as it amended Section 1927(a) of the Omnibus Reconciliation Act. This act includes amendments that relate to the coverage of manufacturers' drugs, duplicate payments, and rebate calculations. [6]

The Omnibus Reconciliation Act of 1993 (OBRA 93') amended Section 1927 of the Act as it brought changes to the Medicaid Drug Rebate Program. [6]

Comparisons with Medicare Edit

Although their names are similar, Medicaid and Medicare are very different programs. Medicare is an entitlement program funded entirely at the federal level.[7] It is a social insurance focusing primarily on the older population. As stated in the CMS website,[8] Medicare is a health insurance program for people age 65 or older, people under age 65 with certain disabilities, and people of all ages with end stage renal disease. The Medicare Program provides a Medicare part A which covers hospital bills, Medicare Part B which covers medical insurance coverage, and Medicare Part D which covers prescription drugs.

Medicaid is a means-tested program that is not solely funded at the federal level. Medicaid is a needs-based social welfare or social protection program rather than a social insurance program. Eligibility is determined by income. States provide up to half of the funding for the Medicaid program. In some states, counties also contribute funds. The main criterion for Medicaid eligibility is limited income and financial resources, a criterion which plays no role in determining Medicare coverage. Medicaid covers a wider range of health care services than Medicare.

Some individuals are eligible for both Medicaid and Medicare (also known as Medicare dual eligibles).[9] In 2001, about 6.5 million Americans were enrolled in both Medicare and Medicaid.

Eligibility Edit

Medicaid is a joint federal-state program that provides health insurance coverage to certain categories of low-income individuals, including children, pregnant women, parents of eligible children, seniors and people with disabilities. Medicaid was created to help low-income individuals who fall into one of these eligibility categories "pay for some or all of their medical bills."[10] Medicaid helps eligible individuals that have no medical insurance or poor health insurance. While Congress and the Centers for Medicare and Medicaid Services set out the main rules under which Medicaid operates, each state runs its own program. As a result, the eligibility rules differ significantly from state to state, although all states must follow the same basic framework.


Having a limited income is one of the primary requirements for Medicaid eligibility, but poverty alone does not qualify a person to receive Medicaid benefits unless they also fall into one of the defined eligibility categories.[2] According to the CMS website, "Medicaid does not provide medical assistance for all poor persons. Even under the broadest provisions of the Federal statute (except for emergency services for certain persons), the Medicaid program does not provide health care services, even for very poor persons, unless they are in one of the designated eligibility groups."[2]


There are a number of different Medicaid eligibility categories; within each category there are requirements other than income that must be met. These other requirements include, but are not limited to, age, pregnancy, disability, blindness, income and resources, and one's status as a U.S. citizen or a lawfully admitted immigrant.[11] Special rules exist for those living in a nursing home and disabled children living at home. A child may be covered under Medicaid if she or he is a U.S. citizen or a legal immigrant of the U.S. A child may be eligible for Medicaid regardless of the eligibility status of his or her parents or guardians. Thus, a child can be covered by Medicaid based on their individual status even if his or her parents are not eligible. Similarly, if a child lives with someone other than a parent, he or she may still be eligible based on his or her individual status.[12]


Medicaid is also the program that provides the largest portion of federal money spent for health care on people living with HIV. Typically, poor people who are HIV positive must progress to AIDS (T-cell count of 200 or under) before they can qualify under the "disabled" category. More than half of people living with AIDS are estimated to receive Medicaid payments. Two other programs that provide financial assistance to people living with HIV/AIDS are the Social Security Disability Insurance (SSDI) and the Supplemental Security Income. However, Medicaid eligibility policy contrasts with the Journal of the American Medical Association (JAMA) guidelines which recommend therapy for all patients at 350 or certain patients higher, and according to a new recent large scale study, asymptomatic HIV positive patients who started on medication with T-cell counts 350 to 500 had a 70 percent higher survival rate than those who waited. This study is results shows that waiting even until the cell count reaches 350 (current JAMA recommendation) increases the risk of death.[13] As many patients can't afford expensive medicines without Medicaid help, HIV annual death counts have failed to decline significantly since 2002.

Recent changesEdit

Both the federal government and state governments have made changes to the eligibility requirements and restrictions over the years. Most recently, the Deficit Reduction Act (DRA) of 2005 (Pub.L. No. 109-171) significantly changed the rules governing the treatment of asset transfers and homes of nursing home residents.[14] The implementation of these changes will proceed state-by-state over the next few years.

The DRA now requires that anyone seeking Medicaid must produce documents to prove that he or she is a United States citizen or resident alien.

Medicaid does not pay benefits to individuals directly; Medicaid sends benefit payments to health care providers. Medicaid helps individuals who have no medical insurance or poor health insurance. In some states Medicaid beneficiaries are required to pay a small fee (co-payment) for medical services.[11]

Budget Edit


Medicaid funding has become a major budgetary issue for many states over the last few years, with states, on average, spending 16.8% of state general funds on the program. If the federal match expenditure is also counted, the program, on average, takes up 22% of each state's budget.[15] [16] According to CMS, the Medicaid program provided health care services to more than 46.0 million people in 2001.[17] In 2002, Medicaid enrollees numbered 39.9 million Americans, the largest group being children (18.4 million or 46 percent). It is estimated that 42.9 million Americans will be enrolled in 2004 (19.7 million of them children) at a total cost of $295 billion. Medicaid payments assist nearly 60 percent of all nursing home residents and about 37 percent of all childbirths in the United States.

Medicaid planners typically advise retirees and other individuals facing high nursing home costs to adopt strategies that will protect their financial assets in the event of nursing home admission. State Medicaid programs do not consider the value of one's home in calculating eligibility, therefore it is often recommended that retirees pursue home ownership. By adopting the recommended strategies, many seniors hope they will quickly qualify for Medicaid benefits if the need for long-term care arises.

During the 1990s, many states received waivers from the Federal government to create Medicaid managed care programs. Under managed care, Medicaid recipients are enrolled in a private health plan, which receives a fixed monthly premium from the state. The health plan is then responsible for providing for all or most of the recipient's healthcare needs. Today, all but a few states use managed care to provide coverage to a significant proportion of Medicaid enrollees. Nationwide, roughly 60% of enrollees are enrolled in managed care plans.[18] Core eligibility groups of poor children and parents are most likely to be enrolled in managed care, while the aged and disabled eligibility groups more often remain in traditional "fee for service" Medicaid.


On November 25, 2008, a new federal rule was passed that allows states to charge premiums and higher co-payments to Medicaid participants.[20] This rule will enable states to take in greater revenues, limiting financial losses associated with the program. Estimates figure that states will save $1.1 billion while the federal government will save nearly $1.4 billion. However, this means that the burden of financial responsibility will be placed on 13 million Medicaid recipients who will face a $1.3 billion increase in co-payments over 5 years.[21] The major concern is that this rule will create a disincentive for low-income people to seek healthcare. It is possible that this will force only the sickest participants to pay the increased premiums and it is unclear what long term effect this will have on the program.

Important legislation Edit

See also Edit

References Edit

External linksEdit


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