Medicaid

Medicaid is our nation's health insurance program for people who are very sick or very poor; people who cannot afford to buy private health insurance, or who private insurance companies will not insure.

Medicaid was enacted in 1965,at the same time as Medicare, to establish a health care safety net for people who were not covered anywhere else. That makes Medicaid one of the most diverse health insurers around: Today, 60 percent of nursing home residents rely on Medicaid, as do as one-quarter of all children.

Funding and Coverage

The federal government and the state governments jointly fund Medicaid. Each state administers its own program, and the federal government monitors the programs and sets quality, funding, and minimum eligibility standards. Medicaid guarantees coverage for basic health care services for adults and more comprehensive coverage for children. It is also the main source of coverage for long-term care.

Fast facts on Medicaid

  • Medicaid covers 29 million children, 15 million parents and pregnant women, and 14 million people who are elderly or have severe disabilities.
  • Medicaid pays for almost one-fifth of all personal health care spending, hospital care, and prescription drug spending. It pays for almost 45 percent of all nursing home care
  • Public hospitals and health centers rely on Medicaid for more than one-third of their revenues.
  • Half of all Medicaid enrollees are children, but they account for less than one-fifth of all program costs. By contrast, the elderly and people with disabilities make up a quarter of Medicaid enrollees, but they account for almost three quarters of the cost.
  • All poor children are eligible for Medicaid, but, in most states, childless adults are not permitted to get coverage no matter how poor they are.
  • States can decide at what level to set income limits, so eligibility levels are different in every state. For example, Alabama only covers working parents if they earn less than 26 percent of the federal poverty level, while Maine covers them if they earn less than 200 percent of the federal poverty level.
  • Medicaid enrollment tends to increase when the economy slows down, because more people need a safety net as they lose private health insurance.