Medicaid

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The Medicaid program provides medical insurance to groups of low-income people and individuals with disabilities. It is the largest source of financing for the healthcare services they need. Medicaid is a nationwide program jointly funded by the federal government and the states. Medicaid eligibility, benefits, and administration are managed by the states within federal guidelines. A program related to Medicaid is the Children's Health Insurance Program (CHIP), which covers low-income children above the poverty line and is sometimes operated in conjunction with a state's Medicaid program. Medicaid is a separate program from Medicare, which provides health coverage for the elderly.

Background[edit]

Established in 1965, Medicaid is the primary source of health insurance coverage for low-income and disabled individuals and the largest source of financing for the healthcare services they need. In 2014, about 80 million individuals were enrolled in Medicaid, or 25.9 percent of the total United States population. According to the Kaiser Family Foundation, Medicaid accounted for one-sixth of healthcare spending in the United States during that year.^[1][2][3]

The federal Centers for Medicare and Medicaid Services (CMS) monitors state Medicaid programs and establishes requirements for service delivery, quality, funding, and eligibility standards. Medicaid does not provide healthcare directly. Instead, it pays hospitals, physicians, nursing homes, health plans, and other healthcare providers for covered services that they deliver to eligible patients.^[3][4]

The Patient Protection and Affordable Care Act of 2010, also known as Obamacare, provided for the expansion of Medicaid to cover all individuals earning incomes up to 138 percent of the federal poverty level, which amounted to $16,643 for individuals and $33,948 for a family of four in 2017. A 2012 United States Supreme Court decision made the Medicaid expansion voluntary on the part of the states.^[5][6]

Administration[edit]

Medicaid is administered through matching grants, in which the federal government matches a percentage of state funding. States maintain some discretion over determining eligibility and benefits for the program.

Medicaid was originally administered by the Social Security Administration (SSA), which was a part of the Department of Health, Education, and Welfare (renamed the Department of Health and Human Services in 1980). In 1977, the program was transferred from the SSA to the Health Care Financing Administration, later renamed the Centers for Medicare and Medicaid Services (CMS). CMS is an agency within the Department of Health and Human Services. Each state also has its own Medicaid agency, responsible for such day-to-day activities as enrolling new members, processing claims, and determining benefits. States are also responsible for administering the Children's Health Insurance Program (CHIP), either through Medicaid or a separate program.^[7][8]

Reimbursement rates[edit]

The Affordable Care Act required Medicaid programs to pay physicians for primary care services at Medicare rates during 2013 and 2014 and provided federal funding for the purpose. States were not required to maintain the higher reimbursement rates after 2014. According to the Urban Institute, in 2016, state Medicaid programs reimbursed doctors at about 72 percent of the rates paid by Medicare. For primary care services, Medicaid reimbursement rates were 66 percent of Medicare rates.^[9][10]

According to the Centers for Disease Control and Prevention, 68.9 percent of physicians accepted new Medicaid patients in 2013, while 83.7 percent accepted new Medicare patients. By comparison, 84.7 percent of physicians accepted new patients with private insurance. 2013 was the most recent year for which such data was available as of July 2017.^[11]

Benefits[edit]

In large part, the states "determine the type, amount, duration, and scope" of benefits offered to individuals enrolled in Medicaid, according to the Centers for Medicare and Medicaid Services. However, benefits are subject to federal minimum standards. The federal government has outlined 16 benefits that are required of all Medicaid programs:^[12][13][14]

In addition, the Affordable Care Act established a requirement for Medicaid programs to provide coverage for prescription drugs, substance abuse treatment, and mental health treatment to all Medicaid enrollees who became eligible under expanded programs. Beyond the required benefits, there are several other optional benefits states may choose to offer enrollees, such as dental care and physical therapy. Other services may be offered with approval from the secretary of the United States Department of Health and Human Services. Benefits offered may not differ from person to person due to diagnoses or condition of health.^[12][14][15]

Eligibility[edit]

Eligibility for each state's Medicaid program is subject to minimum federal standards, both in the population groups states must cover and the maximum amount of income enrollees can make. States may set the income levels higher if they choose—which would have the effect of increasing the number of individuals eligible for the program—but they cannot set them lower. States are required to cover the following population groups and income levels:^[6][16]

• states must cover pregnant women up to at least 138 percent of the federal poverty level ($16,643 for an individual, $33,948 for a family of four in 2017)
• states must cover preschool-age children up to at least 138 percent of the federal poverty level ($16,643 for an individual, $33,948 for a family of four in 2017)
• states must cover school-age children up to at least 100 percent of the federal poverty level ($12,060 for an individual, $24,600 for a family of four in 2017)
• states must cover elderly and disabled individuals up to at least 75 percent of the federal poverty level ($9,045 for an individual, $18,450 for a family of four in 2017)
• states must cover working parents up to at least 28 percent of the federal poverty level ($3,376 for an individual, $6,888 for a family of four in 2017)

The Affordable Care Act authorized states to expand their Medicaid programs to offer coverage to childless adults up to 138 percent of the federal poverty level. It provided 100 percent of funding to cover the new recipients for the first few years and phased down such funding to 90 percent by 2020. The United States Supreme Court ruling in National Federation of Independent Business v. Sebelius (2012) made expansion of the program voluntary on the part of the states.

Maine became the first state to expand via citizen initiative in November 2017. In November 2018, Idaho, Nebraska, and Utah approved ballot initiatives concerning Medicaid expansion and funding for expanded coverage. In November 2018, Montana voters defeated an initiative to extend Montana's Medicaid expansion. Gov. Steve Bullock (D) subsequently signed legislation extending Medicaid expansion.^[17][18][19]

As of January 2022, a total of 38 states and Washington, D.C., had expanded or voted to expand Medicaid, while 12 states had not. The map below provides information on Medicaid expansions by state; for states that expanded, hover over the state to view the political affiliation of the governor at the time of expansion.^[20]

Click [show] on the bar below the map to view eligibility levels for each enrollee category by state.

Dual eligibility[edit]

Some individuals, such as low-income seniors, are eligible for both Medicare and Medicaid; these individuals are known as dual-eligible beneficiaries. For those enrolled in Medicare who are eligible, enrolling in Medicaid may provide some benefits not covered by Medicare, such as stays longer than 100 days at nursing facilities, prescription drugs, eyeglasses, and hearing aids. Medicaid may also be used to help pay for Medicare premiums. As of 2010, one in five Medicare beneficiaries were also enrolled in Medicaid.^[21]

Spending[edit]

According to the Medicaid and CHIP Payment and Access Commission, states dedicated on average 28.6 percent of their budgets to Medicaid in 2016 compared to 21.5 percent in 2006. Total state and federal spending on the program amounted to $553.4 billion nationwide. Hover over the graph below to view total Medicaid spending over time in relation to spending on Medicare and all other health spending, which includes private insurance.^[22][23]

Total spending[edit]

During fiscal year 2016, Medicaid spending nationwide amounted to nearly $553.5 billion. Total Medicaid spending grew by 33 percent between fiscal years 2012 and 2016. Click [show] on the red bar below to view total Medicaid spending by state for fiscal years 2012 through 2016. Total spending figures include both sate and federal spending.^{[24][25][26][27][28]}

Spending details[edit]

Spending per enrollee amounted to $7,067 in fiscal year 2013, the most recent year for which per-enrollee figures were available as of June 2017. Enrollment in the Medicaid program is tracked month-to-month, and as of March 2017, total enrollment nationwide amounted to 74.6 million individuals. According to the Kaiser Family Foundation, prior to the implementation of the Medicaid expansion, average monthly enrollment amounted to 56.8 million individuals. On average, states paid 37 percent of total Medicaid costs in 2016, while the federal government paid the remaining 63 percent. Click [show] on the bar below to view Medicaid spending details by state.^{[29][30][31][32][33][34]}

History[edit]

See also: History of healthcare policy in the United States

Lyndon Johnson signing the Medicaid bill with Harry Truman on July 30, 1965

In 1960, the Kerr-Mills Act was passed to provide assistance to poor, medically needy individuals, and elderly individuals; the law was the precursor to Medicaid. It created a program called Medical Assistance for the Aged, which provided grants to states to establish medical assistance programs for the elderly poor.^[35]

In 1965, President Lyndon Johnson (D) cooperated with Representative Wilbur Mills (D), chairman of the House of Ways and Means Committee and co-sponsor of the Kerr-Mills bill, to pass Medicare legislation. Initially, there were several plans proposed by various congressmen. Rep. Mills cobbled three of them into a single bill, composed of Medicare Part A (hospital insurance), Medicare Part B (outpatient insurance) and Medicaid (medical aid to the needy). The bill was passed by Congress, and President Johnson signed Title XIX of the Social Security Act into law on July 30, 1965, which established Medicaid.^[36][37]

Medicaid was designed as an expansion of the original Kerr-Mills program for the elderly and poor. It also included people with disabilities as well as children and pregnant women eligible for the Aid to Families with Dependent Children (AFDC) program. Unlike Medicare, it was a means-tested program, meaning eligibility was based on income.

Medicaid's payment mechanisms were initially adopted from Medicare, which was a fee-for-service program that used third-party entities to make payments to doctors and hospitals. However, the 1967 Social Security Amendments authorized states to experiment with different Medicaid payment mechanisms. By 2011, nearly 75 percent of Medicaid recipients were enrolled in health maintenance organizations, rather than the traditional fee-for-service program.^[38][39]

Medicaid was created as an optional program for states. Thirty-seven states established programs within the first two years, and by 1982, all states had chosen to participate in Medicaid. Arizona was the last state to establish a Medicaid program. The map to the left displays the establishment of state Medicaid programs over time. Click [show] on the red bar below to view the data for each state.^[40][41][42]

Recent news[edit]

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See also[edit]

• 

  Healthcare policy in the United States

• 

  Impact of the ACA in the United States

• 

  Children's Health Insurance Program

Medicaid in the 50 states[edit]

Click on a state below to read more about the Medicaid program in that state.

Footnotes[edit]