Medicaid

Since 1965, Medicaid has been the backbone of this country's health care safety net. Jointly funded by the states and the federal government, Medicaid covers more than 58 million low-income Americans, including families, people with disabilities, and the elderly. Today, Medicaid provides coverage for almost 29 million children and pays for approximately half of all long-term care costs.

Medicaid insures more than one in seven Americans and accounts for more than 15 percent of our nation’s spending on health care.

Medicaid is jointly funded by the states and the federal government. Federal law requires state Medicaid programs to cover certain categories of individuals and services. Beyond that, states have wide flexibility in the design and implementation of their Medicaid programs.

Medicaid Today: Even though Medicaid has helped millions gain access to health care, many low-income people have been left out. In 30 states, income eligibility for parents is set below 50 percent of poverty (in 2012, that’s an annual income of $9,545 for a family of three). In most states, adults without dependent children, no matter how poor, cannot get Medicaid coverage at all.

Medicaid Expansion: In 2014, as a result of the Affordable Care Act, states can get substantial federal funding to expand Medicaid to all residents with incomes at or below 133 percent of poverty, thus extending Medicaid coverage to individuals who have been left out of the program. [Note: Since 5 percent of income is not included—is “disregarded”—when eligibility is determined, the expansion, in effect, applies to those with incomes at or below 138 percent of poverty.]

Financing

Medicaid Today: Generally speaking, each state receives matching dollars from the federal government, and those matching rates vary across the states from 50 to 76 percent. This means that, for every dollar a state spends on Medicaid, the federal government contributes between $1.00 and $3.17. Federal matching rates are based on the per capita income of the states, so states with lower per capita incomes get higher matching rates.

Medicaid Expansion: In 2014, the Affordable Care Act gives states the opportunity to expand their Medicaid programs to cover all individuals with incomes at or below 138 percent of poverty (see note above), an income of about $31,809 for a family of four in 2012. That will extend coverage to many low-income adults currently left out of the program and simplify eligibility determinations across the program.

Eligibility

Medicaid Today:

Federal Requirements
Federal law requires states to cover certain categories of people in Medicaid. In general, there are six categories of so-called “mandatory” individuals: 1) children, 2) pregnant women, 3) very low-income parents, 4) the elderly, and individuals who are 5) blind or 6) disabled. Eligibility levels for these groups of people vary by income.

State Options
States have the flexibility to increase these income limits to allow more people to qualify for Medicaid.

Medicaid Expansion: In 2014, states can expand their Medicaid programs to cover virtually all individuals under the age of 65 with incomes below 133 percent of poverty. Income eligibility for those over 65 will remain unchanged. For those newly eligible through this expansion, the federal government will cover 100 percent of costs for 2014 through 2016, gradually falling to 90 percent in 2020. The federal contribution will remain at 90 percent thereafter. States have the option to implement this expansion sooner.