MEDICAID INSURANCE FOR AMERICAN CITIZENS

What is Medicaid?

Medicaid is a means-tested health and medical services program for certain individuals and families with low incomes and few resources. Primary oversight of the program is handled at the federal level, but each state:

Establishes its own eligibility standards,
Determines the type, amount, duration, and scope of services,
Sets the rate of payment for services, and
Administers its own Medicaid program.
What services are provided with Medicaid?
Although the States are the final deciders of what their Medicaid plans provide, there are some mandatory federal requirements that must be met by the States in order to receive federal matching funds. Required services include:

Inpatient hospital
Outpatient hospital services
Prenatal care
Vaccines for children
Physician services
Nursing facility services for persons aged 21 or older
Family planning services and supplies
Rural health clinic services
Home health care for persons eligible for skilled-nursing services
Laboratory and x-ray services
Pediatric and family nurse practitioner services
Nurse-midwife services
Federally qualified health-center (FQHC) services and ambulatory services
Early and periodic screening, diagnostic, and treatment (EPSDT) services for children under age 21
States may also provide optional services and still receive Federal matching funds. The most common of the 34 approved optional Medicaid services are:

Diagnostic services
Clinic services
Intermediate care facilities for the mentally retarded (ICFs/MR)
Prescribed drugs and prosthetic devices
Optometrist services and eyeglasses
Nursing facility services for children under age 21
Transportation services
Rehabilitation and physical therapy services
Home and community-based care to certain persons with chronic impairment.


Who is eligible for Medicaid?

Each state sets its own Medicaid eligibility guidelines. The program is geared towards people with low incomes, but eligibility also depends on meeting other requirements based on age, pregnancy status, disability status, other assets, and citizenship.


States must provide Medicaid services for individuals who fall under certain categories of need in order for the state to receive federal matching funds. For example, it is required to provide coverage to certain individuals who receive federally assisted income-maintenance payments and similar groups who do not receive cash payments. Other groups that the federal government considers "categorically needy" and who must be eligible for Medicaid include:

Individuals who meet the requirements for the Aid to Families with Dependent Children (AFDC) program that were in effect in their state on July 16, 1996
Children under age 6 whose family income is at or below 133% of the Federal poverty level (FPL)
Pregnant women with family income below 133% of the FPL
Supplemental Security Income (SSI) recipients
Recipients of adoption or foster care assistance under Title IV of the Social Security Act
Special protected groups such as individuals who lose cash assistance due to earnings from work or from increased Social Security benefits
Children born after September 30, 1983 who are under age 19 and in families with incomes at or below the FPL

Certain Medicare beneficiaries


States may also choose to provide Medicaid coverage to other similar groups that share some characteristics with the ones stated above but are more broadly defined. These include:

Infants up to age 1 and pregnant women whose family income is not more than a state-determined percentage of the FPL
Certain low-income and low-resource children under the age of 21
Low-income institutionalized individuals
Certain aged, blind, or disabled adults with incomes below the FPL
Certain working-and-disabled persons with family income less than 250 percent of the FPL
Some individuals infected with tuberculosis
Certain uninsured or low-income women who are screened for breast or cervical cancer
Certain "medically needy" persons, which allow States to extend Medicaid eligibility to persons who would be eligible for Medicaid under one of the mandatory or optional groups, except that their income and/or resources are above the eligibility level set by their State.
Medicaid does not provide medical assistance for all poor persons. In fact, it is estimated that about 60% of America's poor are not covered by the program.

Who pays for services provided by Medicaid?

Medicaid does not pay money to individuals, but operates in a program that sends payments to the health care providers. States make these payments based on a fee-for-service agreement or through prepayment arrangements such as health maintenance organizations (HMOs).

Each State is then reimbursed for a share of their Medicaid expenditures from the Federal Government. This Federal Medical Assistance Percentage (FMAP) is determined each year and depends on the State's average per capita income level. Richer states receive a smaller share than poorer states, but by law the FMAP must be between 50% and 83%.

States may impose nominal deductibles, coinsurance, or copayments on some Medicaid beneficiaries for certain services. However, the following Medicaid beneficiaries must be excluded from cost sharing:

Pregnant women,
Children under age 18, and
Hospital or nursing home patients who are expected to contribute most of their income to institutional care.
All Medicaid beneficiaries must be exempt from copayments for emergency services and family planning services.