What is Medicaid

Medicaid is the US health insurance program forwhich Medicaid operates, each state runs its own
individuals and families with low incomes andprogram. As a result, the eligibility rules are
resources. It is jointly funded by the states andsomewhat different in every state, although the
federal government, and is managed by theframework is the same throughout the country.
states. Among the groups of people served byBoth the federal government and most state
Medicaid are eligible low-income parents, children,governments have made many changes to the
seniors, and people with disabilities. Medicaid is theeligibility requirements and restrictions over the
largest source of funding for medical andyears. This has most recently occurred with the
health-related services for people with limitedpassage of the Deficit Reduction Act (DRA) of
income.2005 (Pub.L. No. 109-171) which significantly
History and participationchanged rules governing the treatment of asset
Medicaid was created on July 30, 1965 throughtransfers and homes of nursing home residents.
Title XIX of the Social Security Act. Each stateThe implementation of these changes will proceed
administers its own Medicaid program while thestate-by-state over the next few years. To be
federal Centers for Medicare and Medicaidcertain of your rights under the Act you should
Services (CMS) monitors the state-run programsconsult an expert, as the rules are complex. The
and establishes requirements for service delivery,DRA now requires that anyone seeking Medicaid
quality, funding, and eligibility standards.must produce documents to prove that they are
Each state may have their own names for thea United States citizen or resident alien.
program. Examples include "Medi-Cal" in California,Budget
"MassHealth" in Massachusetts, and "TennCare" inUnlike Medicare, which is totally federal, Medicaid is
Tennessee. States may bundle together thea joint federal-state program. Each state operates
administration of Medicaid with other separateits own Medicaid system, but this system must
programs such as the State Children's Healthconform to federal guidelines in order for the
Insurance Program (SCHIP), so the samestate to receive matches and grants. The federal
organization that handles Medicaid in a state maymatching formula is different from state to state,
also manage those additional programs. Separatedepending on each state's poverty level. The
programs may also exist in some localities thatwealthiest states only receive a federal match of
are funded by the states or their political50% while poorer states receive a larger match.
subdivisions to provide health coverage forMedicaid funding has become a major budgetary
indigents and minors.issue for many states over the last few years,
State participation in Medicaid is voluntary;with the program, on average, taking up a
however, all states have participated since 1982quarter of each state's budget. According to CMS,
when Arizona formed its AHCCCS program. Inthe Medicaid program provided health care
some states Medicaid is subcontracted to privateservices to more than 46.0 million people in 2001.
health insurance companies, while other statesIn 2002, Medicaid enrollees numbered 39.9 million
pay providers (i.e., doctors, clinics and hospitals)Americans, the largest group being children (18.4
directly to ensure that individuals receive propermillion or 46 percent). It is estimated that 42.9
medical attention.million Americans will be enrolled in 2004 with (19.7
Comparisons with Medicaremillion of them children). Medicaid payments assist
Although their names are similar, Medicaid andnearly 60 percent of all nursing home residents
Medicare are very different programs. Medicare isand about 37 percent of all childbirths in the United
an entitlement program funded entirely at theStates.
federal level. It focuses primarily on the olderMedicaid is also the program that provides the
population. As stated in the CMS website,[2]largest portion of federal money spent for health
Medicare is a health insurance program for peoplecare on people living with HIV. Typically, poor
age 65 or older, people under age 65 with certainpeople who are HIV positive must progress to
disabilities, and people of all ages with end stageAIDS before they can qualify under the "disabled"
renal disease.category. More than half of people living with
Medicaid is also an entitlement program, but it isAIDS are estimated to receive Medicaid
not solely funded at the federal level. Statespayments. Two other programs that provide
provide up to half of the funding for the Medicaidfinancial assistance to people living with HIV/AIDS
program. In some states, counties also contributeare the Social Security Disability Insurance (SSDI)
funds. The main criterion for Medicaid eligibility isand the Supplemental Security Income.
limited income and financial resources, a criterionFinancial advisors typically advise retirees and
which plays no role in determining Medicareother individuals facing high health costs to adopt
coverage. Medicaid covers a wider range of healthstrategies that will protect their financial assets in
care services than Medicare. In 2001, about 6.5the event of large medical bills. Many programs do
million Americans were enrolled in both Medicarenot consider the value of one's home in calculating
and Medicaid, also known as Medicare dual eligible.eligibility, therefore it is often recommended that
Eligibilityretirees pursue home ownership. By adopting the
Medicaid is a joint federal-state program thatrecommended strategies, seniors hope they will
provides health insurance coverage to low-incomequickly qualify for Medicaid benefits if the need for
children, seniors and people with disabilities. Whilelong-term care arises. A person should seek
Congress and the Centers for Medicare andadvice from a qualified expert who is familiar with
Medicaid Services set out the main rules underMedicaid rules and financial planning.