Medicaid

What is Medicaid?
Established in 1965 as part of the Social Security Act, Medicaid is a federally funded program that provides medical benefits to low-income people who are unable to afford health care coverage. Medicaid now provides health care coverage for over 38 million families, including 3.4 million elderly plus persons with disabilities.¹

Who does Medicaid cover?
The federal government sets the rules under which Medicaid operates, but each state operates its own program. As a result, the eligibility rules are different in every state. In all states, Medicaid covers people who make up to 100 percent of the federal poverty level (FPL), but many states have expanded their coverage to include individuals and families that make more than the FPL. For a list of specific state income eligibility guidelines, visit www.govbenefits.gov.

What does Medicaid cover?
Each state has a certain amount of leeway to determine what services its Medicaid program covers. Core benefits that every state must cover include physician services, laboratory and x-ray services, hospital services, early and periodic screenings, and diagnostic and treatment services for children under 21. Many states also provide optional benefits, such as prescription drug coverage, dental coverage, eye glasses, home health care services and primary care case management.²

Health Insurance Coverage of Nonelderly Americans, by Source of Coverage, 2006

Source: Employee Benefit Research Institute estimates from the March Current Population Survey, 2007 Supplement.
^a Tricare (formerly known as CHAMPUS) is a program administered by the Department of Defense for military retirees as well as families of active duty, retired, and deceased service members. CHAMPVA, the Civilian Health and Medical Program for the Department of Veteran Affairs, is a health care benefits program for disabled dependents of veterans and certain survivors of veterans.

Why is Medicaid important?
Medicaid provides a safety net to more than 38 million individuals. Medicaid ensures that families and individuals who are most in need receive access to health care. The millions of Americans without health insurance live sicker and die younger as a result of their lack of access to health care. Medicaid provides a vital safety net to the very poor, who otherwise cannot afford health care coverage.