Medicaid: What it is, How it Works, Special Conditions

What Is Medicaid?

Medicaid is a public health insurance program that provides coverage to low-income families and individuals in the United States. It is jointly funded by the federal government and states, and operated at the state level. Eligibility is based on specific income criteria.

Recipients of Medicaid are U.S. citizens, permanent residents, or legal immigrants. As of September 2020, approximately 70.6 million people were covered by Medicaid.

Key Takeaways

• Medicaid is a joint federal and state program that provides health care coverage to low-income individuals.
• The federal government matches state spending on Medicaid while states are responsible for designing and administering the program.
• Eligibility is determined based on one’s income in comparison to the federal poverty level.
• Access to Medicaid has been shown to increase individuals with coverage and improve overall health.

Understanding Medicaid

Medicaid, authorized by Title XIX of the Social Security Act in 1965, is a government-sponsored insurance program for individuals who lack the resources and income to cover health care costs. It covers doctor visits, hospital stays, long-term medical care, custodial care, and other health-related expenses.

Each state manages and administers its own Medicaid program, determining coverage and payment processes for health care providers. The federal government matches state spending, with rates varying by state from 50% to 83%. Participation in Medicaid is voluntary for states, though all states currently participate.

Medicaid is the largest source of funding for health-related services for low-income individuals in the U.S. In 2019, total Medicaid spending reached $613.5 billion, accounting for 16% of the nation’s health care expenditure. The federal government covered 64.5% of the costs, while states paid 35.6%.

Medicaid coverage primarily includes low-income children and their parents, pregnant women, people with disabilities, and adults over the age of 65. Eligibility was expanded under the Patient Protection and Affordable Care Act to include adults under 65 with incomes below 133% of the federal poverty level (FPL).

Special Conditions

To determine eligibility for Medicaid, individuals can fill out an application through the Health Insurance Marketplace website or their state’s Medicaid agency.

Eligibility is based on income compared to the FPL. If an individual’s income is less than 100% to 200% of the FPL and they are disabled, a child, pregnant, or elderly, a program may be available for them. If their income is less than 138% of the FPL, there may also be a program available.

Eligibility is determined using an individual’s modified adjusted gross income (MAGI), which includes taxable income and certain deductions.

It’s important to regularly check the Medicaid website for any updates to eligibility and program information.

Trump’s Changes to Eligibility

The Trump administration introduced work requirements for Medicaid, allowing states to remove coverage from individuals who do not meet those requirements. Arkansas was the first state to implement this policy, resulting in 18,000 people losing healthcare coverage. However, federal courts repeatedly blocked this policy, and Arkansas has suspended the requirements.

Medicaid vs. the Patient Protection and Affordable Care Act (PPACA)

The Affordable Care Act, also known as Obamacare, expanded federal funding and eligibility for Medicaid. However, states are not required to participate in the expansion to continue receiving existing Medicaid funding. As of March 2021, 12 states did not expand coverage.

Advantages of Medicaid

Medicaid has significantly reduced the number of uninsured individuals in the U.S., especially with the implementation of the Affordable Care Act. In 2013, an estimated 44 million people lacked health insurance, but by 2017, that number dropped to 27.4 million.

Medicaid is crucial for low-income individuals who lack access to job-based insurance or cannot afford private health insurance. It provides necessary health care, including doctor visits and medication, resulting in improved overall well-being.