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What is Medicaid?

  • Medicaid (sometimes confused with Medicare) is a government health insurance program for individuals and families with low-income
  • Medicaid can cover children and disabled adults that are below an income level
  • Medicaid offers first-payer or supplemental coverage for many medically necessary services.
  • People already receiving Supplemental Security Income (SSI) can also qualify for Medicaid
  • Medicaid is jointly funded by state and federal governments, so benefits may vary by state

How is Medicaid Funded?

The state and the federal government jointly fund Medicaid, but it is up to the states to organize it. The program operates at the state level, and therefore, the program’s scope and management vary significantly from state to state. Federal and state legislators and administrators of Medicaid determine funding requirements and decide which services will be available and how much providers will pay for them. That means critical programs are regularly subject to funding changes. According to the Centers for Medicare and Medicaid Services, the federal government covers about 80 percent of the cost of people insured by Medicaid, depending on the state.

Dual-eligible beneficiaries are those who qualify for both Medicare and Medicaid. These individuals may also qualify for specific Medicare Advantage plans that are pre-coordinated with their Medicaid benefits. 

Children are covered through the Children’s Health Insurance Program (CHIP), which provides coverage for children under 18 with an improved income tax rate and children with pre-existing conditions such as cancer.


Is Medicaid part of Medicare?

Medicaid and Medicare are two separate health care programs. Medicare is handled exclusively by the federal government whereas Medicaid is provided through the federal government’s joint effort and the individual state governments throughout the country. While Medicare benefits start at age 65 or earlier for disabled individuals, there is no age restriction on Medicaid benefits.

They are separate programs, but some people qualify for both Medicare and Medicaid.


Understanding Medicaid Eligibility

Medicaid and the Children’s Health Insurance Program (CHIP) provide health care coverage to approximately 72.5 million Americans. Those covered include children, pregnant women, parents, seniors, and individuals with disabilities.

While Medicare may be more identifiable, Medicaid is the single largest health coverage source in the United States, according to Medicaid.


Who is covered by Medicaid?

There are three categories of individuals who have to be provided Medicaid coverage by the states. They include:

  • Low-income families
  • Qualified pregnant women and children
  • Individuals already receiving Supplemental Security Income from the federal government

The various states can provide additional coverage, such as:

  • Individuals receiving home and community-based services
  • Children in foster care
  • Nursing home assistance
  • Inpatient hospital services, such as room and board, drugs, lab tests, and other benefits when staying in a hospital
Medicaid - Affordable Care Act

Medicaid Expansion

Through the availability of Medicaid expansion offered at the state level by the federal government and the Affordable Care Act, the states can provide more people health services.

At present, 32 of the states and the Washington, D.C. area in the Expanded Medicaid programs. The other 19 states are not in the program.

After 2016, the federal contribution will start to drop. By the year 2020, the federal government’s contribution will be 90 percent, with the participating states paying the additional 10 percent.

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