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Medicaid is a cornerstone of the United States health system, providing essential health coverage to millions of Americans with limited income and resources. This program serves as a critical safety net, ensuring that eligible low-income adults, children, pregnant individuals, elderly adults, and people with disabilities have access to necessary medical care.
As a joint federal and state initiative, its rules and benefits can differ significantly depending on where one lives, but its core mission remains the same: to offer a pathway to health and wellness for the nation's most vulnerable populations. With over 83 million people enrolled, the stability and accessibility of Medicaid are fundamental not only to individual well-being but also to the financial health of hospitals, clinics, and the broader U.S. economy.
Understanding Medicaid begins with its unique structure, a design that balances national standards with state-level flexibility. This framework shapes every aspect of the program, from who is eligible to what services are covered.
A Partnership for Health: Federal and State Roles
Medicaid was established in 1965 as Title XIX of the Social Security Act. It was designed from the outset as a partnership between the federal government and state governments. The federal government, through the Centers for Medicare & Medicaid Services (CMS), sets broad national guidelines, outlines minimum requirements for eligibility and benefits, and provides a significant portion of the funding.
Each state, however, is responsible for administering its own Medicaid program. This means every state establishes its own specific eligibility standards, determines the precise mix of benefits it will offer (beyond the federal minimums), sets payment rates for doctors and hospitals, and manages the day-to-day operations. This dual structure results in not one, but effectively 56 different Medicaid programs—one for each state, the District of Columbia, and the U.S. territories.
This partnership model allows states the flexibility to tailor their programs to the unique needs and economic conditions of their residents. At the same time, it creates a complex and often inequitable landscape of health coverage across the country. For this reason, while this information provides a national overview, it is always essential to consult the specific agency in one's own state for the final rules.
How the Program is Funded and Administered
Medicaid is jointly funded by the federal government and the states. The federal government's share of the cost for most Medicaid services is determined by a formula known as the Federal Medical Assistance Percentage (FMAP). The FMAP rate varies by state based on its per-capita income, with poorer states receiving a higher federal match rate, ranging from 50% to as high as 83%.
It is crucial to understand that Medicaid is a vendor payment program. It does not provide cash payments directly to beneficiaries. Instead, it makes payments directly to the healthcare providers—such as hospitals, clinics, doctors, and pharmacies—that deliver services to eligible individuals.
The Core Mission: A Health Safety Net
The fundamental purpose of Medicaid is to provide medical and health-related services to people who might otherwise be unable to afford them due to low income and limited resources. It is the largest program of its kind in the United States.
To reflect their unique branding and administration, some states use a different name for their program. For example, in California, the Medicaid program is called Medi-Cal. Regardless of the name, the goal remains to provide a foundational layer of health security.
Determining eligibility for Medicaid is a multi-step process that involves assessing both financial and non-financial criteria. The rules can be complex and vary significantly from state to state, especially following the changes introduced by the Affordable Care Act (ACA).
The Two Main Pathways to Eligibility
Historically, Medicaid eligibility was tied to other cash assistance programs. The ACA simplified this system by creating two primary pathways for determining eligibility:
Financial Requirements: Your Income and the Federal Poverty Level (FPL)
Financial eligibility for Medicaid is almost always measured against the Federal Poverty Level (FPL), a set of income thresholds updated annually. Eligibility is expressed as a percentage of the FPL (e.g., an income at or below 138% of the FPL).
The FPL varies by household size. For 2025, the FPL for an individual is $15,650, and for a family of three, it is $26,650. These base numbers are then used to calculate the specific income limits for different Medicaid eligibility groups.
The Role of the ACA in Expanding Adult Coverage
One of the most significant changes to Medicaid came with the ACA. The law gave states the option to expand their Medicaid programs to cover nearly all adults under age 65 with household incomes at or below 138% of the FPL (133% plus a standard 5% income disregard).
This expansion created a new pathway to coverage for millions of low-income adults who were not previously eligible. As of 2025, 41 states and the District of Columbia have adopted the Medicaid expansion.
Understanding the "Coverage Gap" in Non-Expansion States
The Supreme Court ruling that made Medicaid expansion a state option created a "coverage gap" in states that chose not to expand. This gap includes adults whose income is too high to qualify for their state's traditional Medicaid program but too low to qualify for financial assistance on the Health Insurance Marketplace.
Millions of adults, many of whom are working in low-wage jobs, fall into this gap, leaving them without any affordable health coverage options.
Non-Financial Requirements: Residency and Citizenship
In addition to meeting financial criteria, individuals must also meet certain non-financial requirements. An applicant must be a resident of the state where they are applying.
They must also be a U.S. citizen or a qualified non-citizen, such as a lawful permanent resident. Federal law generally requires that many lawfully present immigrants complete a five-year waiting period before becoming eligible, though states have the option to waive this for children and pregnant individuals.
Who Medicaid Traditionally Serves: Key Eligibility Groups
While the ACA created a broad new eligibility category, Medicaid continues to serve several core groups, often with more generous income limits.
The Debate Over Work Requirements
In recent years, a debate has emerged around requiring certain Medicaid beneficiaries to work or engage in related activities. Proponents argue this encourages self-sufficiency, while opponents point to evidence that such requirements create administrative hurdles that cause eligible individuals to lose coverage.
The paperwork and reporting can be complex, especially for individuals with chronic health conditions or unstable housing. Data from the Congressional Budget Office has shown that such policies lead to coverage losses, not because people are unwilling to work, but because they are unable to navigate the administrative complexity.
Medicaid provides a comprehensive set of health benefits, though the exact package of services can vary from one state to another.
Federally Mandated Benefits: The Core Services
Federal law requires every state Medicaid program to cover a specific set of mandatory benefits to ensure a consistent baseline of care.
These include:
For children under 21, Medicaid provides a comprehensive benefit known as Early and Periodic Screening, Diagnostic, and Treatment (EPSDT). This requires states to cover all medically necessary services to correct or ameliorate health conditions. EPSDT includes regular checkups, vision and hearing screenings, dental care, and immunizations.
State-Selected Optional Benefits
Beyond mandatory services, states can cover a broad array of optional benefits. This is where the most significant variation in coverage occurs.
Common optional benefits include:
Coverage for Long-Term Services and Supports (LTSS)
One of Medicaid's most vital roles is as the primary payer for long-term services and supports (LTSS). These are services for individuals with chronic conditions or disabilities who need assistance with daily activities, which are generally not covered by Medicare or private insurance.
Medicaid covers a full continuum of LTSS, including:
How Services are Delivered: Managed Care vs. Fee-for-Service
States use two primary models to deliver and pay for Medicaid services:
This shift to managed care means beneficiaries often navigate the rules of a specific insurance company. They may need to select a primary care provider (PCP), get referrals to see specialists, and seek prior authorization for certain services.
Applying for Medicaid can seem daunting, but states have created multiple pathways to make the process more accessible. You can apply for Medicaid at any time of year; there is no limited open enrollment period.
Ways to Submit Your Application
There are several common methods for submitting a Medicaid application:
The application process is designed to have "no wrong door." Even if you start at the Marketplace when you actually qualify for Medicaid, the systems are designed to route your application to the correct program. Be prepared for the state agency to follow up with requests for more detailed information.
Preparing Your Application: Documents and Information Needed
Gathering certain documents ahead of time can make the application process smoother. Be prepared to provide the following for yourself and your household:
What to Expect After You Apply
After you submit your application, the state Medicaid agency will review your information. In many cases, the agency can verify information through secure electronic data sources. If information cannot be verified electronically, the agency will contact you to request additional documentation.
States generally have 45 days to process a Medicaid application, or up to 90 days if a disability determination is required. You will receive an official notice in the mail explaining whether you are eligible and when your coverage begins.
The landscape of U.S. health coverage includes several large government programs. Understanding the distinct roles of Medicaid, Medicare, and the Children's Health Insurance Program (CHIP) is key to navigating your options.
Medicaid vs. Medicare: Key Differences
Medicaid and Medicare are the two largest government health insurance programs, but they serve different populations and operate in different ways.
| Feature | Medicaid | Medicare |
|---|---|---|
| Primary Beneficiaries | Individuals and families with low income, including children, pregnant women, adults, seniors, and people with disabilities. | People age 65 or older, younger people with certain long-term disabilities, and people with End-Stage Renal Disease. |
| Administration | A joint partnership administered by individual states within broad federal guidelines. | A federal program administered by the Centers for Medicare & Medicaid Services (CMS) with uniform rules nationwide. |
| Funding | Jointly funded by federal and state governments through general tax revenues. | Funded by payroll taxes, beneficiary premiums, and federal general revenues. |
| Cost to Beneficiary | Generally no premium. Cost-sharing (copayments) is typically non-existent or very low. | Beneficiaries pay monthly premiums, annual deductibles, and coinsurance for services. |
| Long-Term Care | The primary payer for long-term services and supports, including nursing home care and personal care services. | Provides very limited coverage for short-term skilled nursing facility care following a hospital stay; does not cover long-term custodial care. |
When You Can Have Both: Dual Eligibility
Some individuals—primarily low-income seniors and younger people with disabilities—qualify for both Medicare and Medicaid at the same time. These individuals are known as "dual eligibles".
For this population, the two programs work together. Medicare pays first for all Medicare-covered services. Medicaid then acts as a secondary payer, covering costs that Medicare does not, such as premiums, deductibles, and coinsurance. Critically, Medicaid may also cover essential services that Medicare excludes, most notably long-term care.
The Children's Health Insurance Program (CHIP)
The Children's Health Insurance Program (CHIP) is a joint federal-state program that works closely with Medicaid. It provides low-cost health coverage for children in families who earn too much to qualify for Medicaid but cannot afford private insurance.
Like Medicaid, each state has its own CHIP program. In some states, CHIP is an extension of Medicaid, while in others it is a separate entity. CHIP provides a comprehensive benefit package that typically includes:
For many families, CHIP coverage is free. For those with higher incomes, there may be modest fees or copayments, but total costs are capped at 5% of a family's annual income.
Navigating Medicaid requires accurate and trustworthy information. The following resources can help you find the answers you need.
No, there is no open enrollment period for Medicaid. You can apply for health coverage at any time during the year. If you meet your state's eligibility requirements, which are primarily based on income and household size, your coverage can begin immediately.
Yes, in many situations. Medicaid can offer retroactive coverage for up to three months prior to your application date. If you were eligible during that period, Medicaid may pay for covered medical services you received before your application was officially approved, helping to relieve the burden of unexpected health costs.
For most applicants, no. States generally do not count your primary home or one vehicle as assets when determining Medicaid eligibility. However, other "countable" assets like cash and savings are subject to low limits, which can vary by state and the specific Medicaid program you are applying for.
If your Medicaid application is denied, you have the right to appeal the decision within a specific timeframe. You can request a fair hearing to have your case reviewed. It is also wise to check the denial notice for the reason and see if correcting an error and reapplying is a faster option.
Your state’s Medicaid agency provides an official online provider directory where you can search for doctors, hospitals, and specialists who accept Medicaid. You can also call the member services number on your Medicaid card for assistance in locating a provider near you and to have a printed directory mailed to you.
Generally, no. Medicaid coverage does not transfer between states. Each state administers its own program with unique rules. If you move, you must close your case in your previous state and reapply for Medicaid in your new state of residence to maintain health coverage.
For many beneficiaries, Medicaid is free. However, depending on your state's rules and your income level, you may be responsible for very small copayments for some services or prescriptions. Certain vulnerable groups, like children and those in long-term care facilities, are typically exempt from these costs.
You must report all significant life changes, such as a change in income or household size from a new job or marriage. These changes can affect your eligibility. If a higher income makes you ineligible for Medicaid, this event will trigger a Special Enrollment Period to buy a private plan on the Health Insurance Marketplace.
While all states must provide comprehensive dental and vision benefits for children under 21, adult coverage is an optional benefit that differs by state. Some states offer extensive dental and vision care for adults, while others may only cover emergencies or offer no services at all.
To maintain your health coverage, you must go through an annual renewal process. Your state will review your eligibility to ensure you still qualify for Medicaid. You may be renewed automatically, or you might receive a renewal packet by mail or email that you must complete and return promptly.
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