Having adequate health care coverage is essential to our health and well-being. But if your income is limited, private health insurance may be out of reach. That’s where Medicaid comes in.

What is Medicaid?

Medicaid is a public health insurance program for people with low income and limited resources. It pays for a broad range of medical services and limits out-of-pocket costs for eligible adults, older adults, children, pregnant women, and people with disabilities.

Medicaid plays a major role in our nation’s health care system, insuring about 18.9% of the U.S. population.¹ Many of these people have health care needs that are complex and costly. Roughly 1 in 4 Medicaid enrollees are older adults and people with disabilities.²

Medicaid programs may have different names from state to state. For example, in California, the program is called “Medi-Cal.” In Oklahoma, it’s referred to as “SoonerCare.”

How is Medicaid funded?

Medicaid is a federal-state partnership. It’s funded jointly by the U.S. government and individual states. Most Medicaid enrollees receive their benefits through private managed care or integrated care plans. Others receive their care through the Fee-for-Service system (where Medicaid pays providers directly for the services they provide).

What does Medicaid cover?

States are required by law to cover certain health care services through their Medicaid programs, including:

• Doctor visits
• Hospital services (inpatient and outpatient)
• Mental health services
• Substance use treatment
• Preventive care (e.g., immunizations)
• Long-term care (in nursing homes and at home)

Many states also choose to cover additional services such as:

• Physical and occupational therapy
• Home- and community-based services
• Prescription drugs
• Dental and vision care
• Prosthetic devices

Check with your state Medicaid office to learn more about the scope of coverage provided.

Who is eligible for Medicaid?

Since each state operates its own Medicaid program, guidelines may vary. Regardless of where you live, you may be able to qualify for Medicaid based on your:

• Age
• Income level
• Household size
• Disability status

Some states have broadened their Medicaid eligibility rules to cover all people below certain income levels. If your state has expanded Medicaid coverage, you can qualify for the program based on your income alone. You must also meet requirements for state residency and U.S. citizenship. If you’re not a U.S. citizen, you must be a qualified non-citizen (i.e., lawful permanent resident).

The best way to see if you qualify for Medicaid is to reach out to your state's Medicaid office. Find Medicaid contact information for your state on the Medicaid website.

You can also visit HealthCare.gov to check if you qualify for Medicaid based on your income.

Is Medicaid free?

One of the primary goals of Medicaid is to provide free or low-cost health care coverage to people in need. Since the program serves low-income groups, states are limited in what they can charge for premiums and cost sharing. For example, states cannot impose premiums on enrollees who have incomes lower than 150% of the federal poverty level. Total Medicaid out-of-pocket costs cannot be greater than 5% of a family’s income.

What is the difference between Medicaid and Medicare?

Medicaid and Medicare are two separate programs. Medicare is a federal health insurance program for older Americans. While you must be age 65 to get Medicare in most cases, it also covers younger people with specific disabilities. Medicaid serves a much broader range of populations.

Additionally, with Medicare, members usually pay a share of their health care costs through deductibles, coinsurance, and copayments. Since the Medicaid program serves low-income groups, its enrollees have minimal or no out-of-pocket costs for covered medical expenses.

Can I have both Medicare and Medicaid?

About 12 million Americans have both Medicare and Medicaid coverage.³ These people are “dual eligible.” Medicaid can cover Medicare co-payments and deductibles, lowering your out-of-pocket costs. It may also provide services not covered by Medicare, such as vision, hearing, and dental care.

If you’re dual eligible, you have multiple options for coordinating your coverage and care. The standard choice is having Original Medicare with separate coverage through Medicaid. However, you can also choose to enroll in a Dual Eligible Special Needs Plan (D-SNP) if one is offered in your area.

What are Medicare Savings Programs?

Medicare Savings Programs (MSPs) are Medicaid-administered programs for people on Medicare who have limited means. These programs help cover Medicare premiums and cost-sharing for those who don't qualify for full Medicaid. In essence, MSPs make Medicare more affordable to those who qualify. There are four different types of MSPs, each with different income and resource eligibility limits.

How do I apply for Medicaid?

You can apply for Medicaid through your state Medicaid agency or through the Health Insurance Marketplace. Unlike Medicare, which has specific enrollment periods, you have the option to apply for Medicaid any time of year.

Sources

1.Percentage of people covered by Medicaid in the United States from 1990 to 2021, Statista. Found on the internet at https://www.statista.com/statistics/200960/percentage-of-americans-covered-by-medicaid/#:~:text=The%20percentage%20of%20Americans%20covered,of%2019.6%20percent%20in%202015.

2. 10 Things to Know about Medicaid: Setting the Facts Straight, KFF. Found on the internet at: https://www.kff.org/medicaid/issue-brief/10-things-to-know-about-medicaid-setting-the-facts-straight/

3. Introduction to Medicare-Medicaid Dual Eligibles and Service Delivery Models, AHIP. Found on the internet at https://www.ahip.org/resources/introduction-to-medicare-medicaid-dual-eligibles-and-service-delivery-models