Definition of Medicaid

Medicaid is part of the safety net the United States devised in 1965 for its poorest and most medically needy residents. It functions exclusively as a healthcare payer to benefit qualified individuals in need of urgent as well as routine medical care. In many cases it also pays for durable medical equipment. This definition of Medicaid has led to the erroneous belief that the program is open to anyone at or below the poverty level, which is actually not the case. Read on to learn about the real definition of Medicaid and also familiarize yourself with the intricacies as well as the future outlook of the program.

History

• Medicaid is a relatively young program. It became law in 1965 with the passage of the Social Security Act. With an eye on state sovereignty, each state participates in the program at its own discretion. This means that Medicaid eligibility also varies from state to state. The Centers for Medicare and Medicaid Services, a.k.a. CMS (a link is provided in the resources section), is the governing body that oversees the states in their administration of the Medicaid program.

Misconceptions

• It is a common misconception that the only requirement for participation in the Medicaid program is personal poverty or age, as is the case with Medicare. This is incorrect and introduces you to the first aspect of Medicaid's definition: it is a federally and state funded program. However, it is state administered. In addition to being financially disadvantaged and also elderly, you can qualify for Medicaid by falling into one of several state defined needs groups.

Prevention/Solution

• The federal government defines basic eligibility of certain groups. As outlined in the 2005 Medicaid at a Glance booklet (a link is posted in the resources section), the federal government requires all states to provide Medicaid services to one of the following groups: those unconditionally needy, those medically needy, or those who are members of a protected group. Membership in each group is distinct, but still leaves room for the states to apply their own interpretations.

Identification

• You are unconditionally needy if your family qualifies for AFDC or you individually receive SSI, you are pregnant and earn less than 133% of the defined poverty level, you are a child under the age of six, or if you have children between the ages of 6 and 19 and your income is no more than the poverty level. You are medically needy if you are a child, a senior above the age of 65, or disabled. Special groups are those who are Medicare recipients, employed disabled workers, or women with breast cancer or cervical cancer. In some states, you may also be eligible as a special group member if you have tuberculosis.

Theories/Speculation

• Georgetown University's Health Policy Institute issued a May 2008 report (a link is provided in the resources section) that examines the fiscal outlook for the Medicaid program in light of shrinking state and federal budgets. With about 60.5 million United States residents benefiting from Medicaid in 2007 and the fact that federal fund matching varies from state to state, this is sure to lead to Medicaid budget cuts in states with less than favorable funding. Georgetown surmises that employment losses are going to put a new strain on the Medicaid system, while individual states are failing to allocate funds for the most needed aspects of their Medicaid programs and cutting out those that are non-essential. This is bound to lead to budget shortfalls, cuts in spending, and also a possible redefinition of eligibility for Medicaid on the state levels. Hardest hit are most likely Maine and Missouri, which spend 32% and 32.9% respectively of their budgets on the program; by comparison, Wyoming only spends 6.6% of its budget on Medicaid and is likely to not see any cuts.