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From dKosopedia

Medicaid is a health insurance 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 their own names 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 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 to ensure that individuals receive proper medical attention.

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, while Medicaid is a social welfare program with both state and federal funding.[1] One criterion for Medicaid eligibility is being impoverished under the program's guidelines — this plays no consideration in determining Medicare coverage.

While Medicaid and Medicare cover similar groups, there are important differences between them. For example, Medicaid covers a wider range of health care services than Medicare. In 2001, about 6.5 million Americans were enrolled in both Medicare and Medicaid, also known as Medicare dual eligible.


Medicaid is a joint federal-state program that provides health insurance coverage to low-income children, seniors and people with disabilities. 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 are somewhat different in every state, although the framework is the same throughout the country.

Both the federal government and most state governments have made many changes to the eligibility requirements and restrictions over the years. This has most recently occurred with the passage of the Deficit Reduction Act (DRA) of 2005 (Pub.L. No. 109-171) which significantly changed rules governing the treatment of asset transfers and homes of nursing home residents.[2] The implementation of these changes will proceed state-by-state over the next few years. To be certain of your rights under the Act you should consult an expert, as the rules are complex. The DRA now requires that anyone seeking Medicaid must produce documents to prove that they are a United States citizen or resident alien.


Unlike Medicare, which is totally federal, 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 matches and grants. This federal funding only pays for about half the states' Medicaid costs, with the states themselves funding the remainder.

Medicaid funding has become a major budgetary issue for many states over the last few years, with the program, on average, taking up a quarter of each state's budget. According to CMS, the Medicaid program provided health care services to more than 46.0 million people in 2001.[3] 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 with (19.7 million of them children). 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.

Financial advisors typically advise retirees and other individuals facing high health costs to adopt strategies that will protect their financial assets in the event of large medical bills. Many 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, seniors hope they will quickly qualify for Medicaid benefits if the need for long-term care arises. A person should seek advice from a qualified expert who is familiar with Medicaid rules and financial planning. See Elder law.


Important legislation

See Also


External links

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This page was last modified 20:35, 24 January 2007 by dKosopedia user Lestatdelc. Content is available under the terms of the GNU Free Documentation License.

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