Beginner’s Guide to Medicaid Coverage

Posted in Health Insurance

November 24th, 2009

Medicaid is a federal and state-run health insurance program for certain low-income individuals. It’s been around for almost fifty years, but most people don’t know much about it. Read on for an overview of Medicaid’s history, how it works and how you can take advantage of it.

Medicaid History

Medicaid was founded in 1965 as part of Title XIX of the Social Security Act. At its inception, Medicaid offered health care to some 4 million people; today, that number has grown to over 50 million for a total estimated cost of over $340 billion. Additionally, the poor economy and resulting job losses are expected to increase Medicaid enrollment even further.

How Medicaid Works

Medicaid is designed to provide health care for certain low-income individuals and families who wouldn’t have insurance otherwise. As a program, it is run on a state-by-state basis. Details regarding enrollment, qualification, administration and fee sharing will vary by state, but the essential mission is adhered to across the board. Some states, for example, contract with private health insurance companies to provide health services, which they are then reimbursed for. The states are then reimbursed by the federal government. Federal matching dollars for a state’s Medicaid expenses are determined by that state’s poverty level. For example, wealthier states may get only 50% of their Medicaid funding from the federal government, whereas poorer states will get more. Overseeing each state Medicaid system is the federal Centers for Medicare and Medicaid Services (CMMS).

Medicaid Eligibility

Medicaid was created to provide health care coverage for certain individuals who can’t afford private health insurance. That continues to be its central mandate today, although some aspects have been modified over the years. For example, proof of American citizenship is now required in order to enroll. While lack of citizenship makes an applicant ineligible for Medicaid, if he or she has a child who is a citizen, that child could be eligible for Medicaid coverage despite the fact that the parents are not. Lawfully admitted immigrants may also apply for Medicaid coverage provided they have the proper documentation.

Factors that influence a person’s eligibility for Medicaid include age (under 18), pregnancy, disabilities and as mentioned, financial resources. Medicaid does not cover a person simply because he or she is poor, however; nor does it guarantee coverage even if eligibility criteria are met.

The Future of Medicaid

Medicaid and Medicare, as the two primary government-run health care systems, are very close to the heart of the current health care debate. Depending on what happens next, Medicaid’s future could go in several different directions. It has grown in scope and mandate over the years, is considered “too big to fail,” and no one disputes the projections that it will continue to mushroom in enrollment and cost. Depending on which version of a health care reform bill is signed into law – if one is at all – Medicaid will most likely be looking at cuts. President Obama has already signaled his desire for cuts totaling $313 billion, although many of these won’t be as painful once other parts of his health care bill go into effect. Given all the uncertainty and debate that surrounds the health care question, it’s not at all clear where and in what form Medicaid will end up.