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  Medicaid is the United States health program for individuals and families with low incomes and resources. It is jointly funded by the states and federal government, and is managed by the states. Among the groups of people served by Medicaid are eligible low-income parents, children, seniors, and people with disabilities. Medicaid is the largest source of funding for medical and health-related services for people with limited income.


History and participation

Medicaid was created on July 30, 1965 through Title XIX of the Social Security Act. Each state administers its own Medicaid program while the federal Centers for Medicare and Medicaid Services (CMS) monitors the state-run programs and establishes requirements for service delivery, quality, funding, and eligibility standards.

Each state may have its own name for the program. Examples include "Medi-Cal" in California, "MassHealth" in Massachusetts, and "TennCare" in Tennessee. States may bundle together the administration of Medicaid with other separate programs such as the State Children's Health Insurance Program (SCHIP), so the same organization that handles Medicaid in a state may also manage those additional programs. Separate programs may also exist in some localities that are funded by the states or their political subdivisions to provide health coverage for indigents and minors.

State participation in Medicaid is voluntary; however, all states have participated since 1982 when Arizona formed its Arizona Health Care Cost Containment System (AHCCCS) program. In some states Medicaid is subcontracted to private health insurance companies, while other states pay providers (i.e., doctors, clinics and hospitals) directly.

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.[1] 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. [2]

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.[3]

The Medicaid Drug Debate 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 of Medicaid programs were paying for outpatient drugs at their discounted prices. [4]

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. [5]

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

Comparisons with Medicare

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 not an entitlement program, and it 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 (known as , also known as Medicare dual eligibles).[9] In 2001, about 6.5 million Americans were enrolled in both Medicare and Medicaid.


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. This program has been created in order to help these groups of low-income individuals with any and/or all of their medical bills. [10] Medicaid helps 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.

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. [11] The implementation of these changes will proceed state-by-state over the next few years.

One of the primary requirements for Medicaid eligibility is having a limited income. Medicaid does not pay individuals directly; Medicaid sends benefit payments to health care providers. Medicaid helps individuals that 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. [12] 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, disabled, blind, old age, income and resources, and being a U.S. citizen or a lawfully admitted immigrant. [13] 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. Regardless if their parent is eligible for Medicaid, a child can still be covered based on their individual status, not their parents. Also if a child lives with someone that is not their parent, they may still be eligible because once again their eligibility is based on their individual status. [14]

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.


Unlike Medicare, which is solely a federal program, Medicaid is a joint federal-state program. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive matching funds and grants. The federal matching formula is different from state to state, depending on each state's poverty level. The wealthiest states only receive a federal match of 50% while poorer states receive a larger match.

Medicaid funding has become a major budgetary issue for many states over the last few years, with the program, on average, taking up 22% of each state's budget.[15] According to CMS, the Medicaid program provided health care services to more than 46.0 million people in 2001.[16] 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 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 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.

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.[17] 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.

Some states operate a program known as the Health Insurance Premium Payment Program (HIPP). This program allows a Medicaid Recipient to have private health insurance paid for by Medicaid. Often this allows the recipient to have better coverage, and have more doctors available to them.

Important legislation

  • 1965 PL 89-97 Medicaid
  • 1997 PL 105-33 Balanced Budget Act (Children's Health Insurance Program)
  • 1990 OBRA Federal legislation: the beginnings of the Health Insurance Premium Payment Program (HIPP), under the George Bush Administration


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This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Medicaid". A list of authors is available in Wikipedia.
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