|  | Healthcare Industry | Medicaid

What Is Medicaid?

Medicaid is a social service program that provides health insurance to children and certain needy families and individuals. Medicaid is often confused with Medicare, but the two are vastly different programs. Medicare is a health insurance program for people age 65 and over, and enrollees are eligible regardless of income level. Medicaid covers certain impoverished families and children who meet strict eligibility requirements.

  1. History

    • Medicaid was established in 1963 under Title XIX of the Social Security Act to help low-income families and children have access to health care. As written in the legislation, four categories of impoverished people can qualify for Medicaid--blind, disabled, aged, and families with dependent children. In 1967, Medicaid children under age 21 were granted Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) health services. EPSDT offers early screening for health problems. In 1986, Medicaid coverage for impoverished pregnant women and children under age one was added as a state option.

    Function

    • Medicaid is jointly funded by the federal and state government. Each state has its own Medicaid program that is overseen by the federal Centers for Medicare and Medicaid Services (CMS). CMS sets national standards for funding, quality and eligibility standards, though some states set their own guidelines for eligibility. Health care for children is managed by the State Children's Health Insurance Program (CHIP). In some states, Medicaid sends a payment directly to the health care provider at no charge to the patient. In other states, patients must pay a small co-payment for services. Medicaid generally covers hospital and doctor visits, prenatal care, emergency room visits and some prescription medication. The annual Medicaid cost is, on average, $6,631 per adult enrollee and $1,856 for each enrolled child.

    Size

    • Over 39 million people are covered under Medicaid, and of this number 28 million are children. About 37 percent of the nation's children are enrolled in Medicaid.

    Identification

    • Not all low-income people qualify for Medicaid. Each state has its own eligibility standards, but in general, a case worker will look at assets, like a person's bank account and real property, annual income, and whether the person is a U.S. citizen or lawfully admitted immigrant. For children, eligibility is based on their status--not their parents. People eligible for Medicaid may or may not also receive cash benefits from the Temporary Assistance for Needy Families (TANF) program or Supplemental Security Income (SSI) program. Medicaid applications are handled by a case worker.

    Considerations

    • In many states, Medicaid is subcontracted to a private health insurance company and enrollees choose which company to be covered by. Medicaid is always a hot-button political issue due to its high costs. Federal Medicaid expenditures were $181.7 billion in 2007. As expensive as it is, if Medicaid costs were cut, many families would be without insurance.

Medicaid - Related Articles