Medicaid 101: What You Need to Know

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While Medicaid is often a hot topic in political news, many U.S. citizens are unclear on the ins and outs of this government-funded healthcare option. This federally based program is designed to provide healthcare to low-income Americans who cannot otherwise afford health insurance. Medicaid’s eligibility requirements and coverage options can be confusing, especially since the program is deployed differently in each state.

The concept of government-funded healthcare for the poor was first introduced by President Truman in 1945. This idea was batted around by Congress for 20 years until President Johnson signed it into law in July 1965. Title XIX of the Social Security Act simultaneously created Medicare and Medicaid, two programs that are sometimes difficult to distinguish.

Despite their common origins, Medicaid and Medicare are different programs. Medicaid uses a combination of federal and state funding to assist low-income families with medical costs. Its eligibility requirements are strict, usually requiring that a family have few or no assets. Medicaid operates independently of other governmental aid programs.

An outgrowth of early cash assistance programs for needy U.S. families, Medicaid allocates federal funds to individual states; these funds are then used to provide healthcare to families meeting certain guidelines. As Medicaid has evolved over the years, these guidelines have grown complicated, with rules unique to each state based on family income relative to the Federal Poverty Level (FPL). Other qualifying criteria may include family size, age of children, existing disability or care of foster children.

Medicare, on the other hand, is a federal program tied to Social Security that is primarily designed to assist retired seniors with healthcare costs. Funded by federal and taxpayer dollars, Medicare provides health insurance to elderly citizens who no longer have access to employer-sponsored health plans. Any American over age 65 may enroll, and income does not affect eligibility. Medicare is also available to younger individuals who receive assistance through Social Security in the form of disability or supplemental income payments.

How Does Medicaid Work?

Medicaid costs are shared by federal and state government. Federal funding is allocated to each state based on its per capita income. On average, 57% of expenses are borne by the federal government; the remaining costs are covered by state tax revenues. In some states, families contribute to the program through small out-of-pocket payments.

While state governments have considerable latitude in implementing Medicaid programs, federal powers-that-be have designated certain groups of Americans as categorically needy. In all states, it is mandatory that Medicaid be available to:

  • Any family with children that qualifies for the Aid to Families with Dependent Children program
  • Any child aged 5 or younger whose family income falls below 133% of the FPL
  • Any pregnant woman whose income falls below 133% of the FPL
  • Any infant born to a Medicaid-eligible mother, until age 1
  • Any recipient of Title IV-E foster care or adoption assistance
  • All children under age 19 whose family income meets or falls beneath the FPL

Each state may choose which other groups are eligible, based on criteria established by the state’s legislature.

What Coverage Can I Get with Medicaid?

Every state must offer certain services for categorically needy residents. These include:

  • Inpatient and outpatient hospital services
  • Prenatal and postpartum pregnancy care
  • Required vaccinations
  • Physician services
  • Nurse-midwife or pediatric/family nurse practitioner services
  • Home health care
  • Family planning services
  • Laboratory and x-ray services
  • Health clinics in rural areas
  • Nursing facilities for residents aged 21 and older
  • Dental care

Individual states may then choose to fund additional services. Commonly approved additional coverage includes:

  • Prescribed drugs and prosthetics
  • Vision care
  • Diagnostic services
  • Intermediate care
  • Nursing facilities for resident younger than 21
  • Transportation
  • Hospice
  • Chronic illness home care
  • Case management services

Some states may choose to bundle Medicaid for children with the Children’s Health Insurance Program (CHIP). CHIP programs are frequently administered for low-income families who do not qualify for Medicaid. Federal and state funds are allocated to CHIP programs just as for Medicaid; similarly, some core services are federally mandated and some are optional.

How Can I Get Medicaid?

If you think you may qualify for Medicaid in your state, it is worth your time to apply. If you are disabled and receiving Supplemental Security Income, you may not need to apply, though you should confirm this with your local Social Security Office. You may also apply through your state’s Health and Human Services Department, at hospitals or welfare offices, or online if your state offers this option. If you are unsure where you may apply, begin with your local Social Security branch.

If you are granted coverage, you will receive an information packet that explains your next steps. Generally, you choose a care provider from a list, or you may locate a doctor on your own who accepts Medicaid patients. After you report your physician’s name to Medicaid officials, you will receive an insurance card in the mail, and then you may see your doctor. Children’s care services are usually free, but patients over age 18 should expect to have small co-pays.

According to 2009 U.S. Census data, over 47,000,000 Americans, or 15.6% of the population, are receiving Medicaid benefits. This number promises to increase in January 2014 as new provisions of the Affordable Care Act take effect. The Obama administration has pledged to raise the minimum eligibility to 133% of the FPL for all families, and to loosen other criteria. If your family isn’t eligible now, it may be in 2014; consider investigating the resources listed here to see if you qualify.

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