Medicaid, << MEHD uh kayd, >> is a United States government program that works in cooperation with state governments to partly finance medical assistance to needy people. Individual state governments administer their own state Medicaid programs, and the federal government pays a portion of the states’ costs. Within broad federal guidelines, states have considerable freedom to define who is eligible for Medicaid and what categories of medical services are covered. However, all state programs must meet certain basic standards in order to receive federal funding.
Federal law requires that states extend Medicaid eligibility to some categorically needy groups. These groups include elderly and disabled people who receive support from certain other federal assistance programs, as well as certain low-income families, children, and pregnant women. In addition, states have the option of providing coverage for other groups, including those considered medically needy. Medically needy groups may include people with incomes above the usual eligibility levels who need assistance with large medical expenses.
Services generally covered by Medicaid include basic hospital services, nursing home care, home health care, vaccines for children, laboratory and X-ray services, and prenatal care (medical treatment during pregnancy). States may also fund additional services, such as optometrist care, physical therapy, and prescription drugs.
State Medicaid programs set payment rates for health care services. Many state programs pay for services through managed care health insurance plans such as health maintenance organizations (HMO’s). Federal law does not require that health care providers participate in Medicaid, but if they do, they must accept Medicaid payment rates. States may require some Medicaid recipients to pay a small share of the costs of certain services.
Congress established Medicaid in 1965 as an amendment to the Social Security Act of 1935. The Centers for Medicare and Medicaid Services, an agency of the U.S. Department of Health and Human Services, oversees Medicaid on the federal level.
