What is 'Medicaid'

Medicaid is a health care program that assists low-income families or individuals in paying for long-term medical and custodial care costs. Medicaid is a joint program, funded primarily by the federal government and run at the state level, where coverage may vary.

Medicaid is available only to individuals and families that meet specified criteria. Recipients must be legal permanent residents or citizens of the United States and may include adults with low income, their dependents and people with specified disabilities.

BREAKING DOWN 'Medicaid'

The Health Insurance Association of America (HIAA) indicates that Medicaid is a government-sponsored insurance program for individuals of any age whose resources and income are insufficient to cover health care. In the United States, Medicaid is the largest source of funding for health-related services for low-income persons. Funded jointly by state and federal governments, but mainly by the latter, Medicaid is managed at the state level.

Every state has significant leeway in determining who is eligible for the program. Each state also has the right to not participate in the Medicaid program. It is possible to determine eligibility for Medicaid in one of two ways. One way is to fill out an online application through the Health Insurance Marketplace website. An alternative way to apply is directly through the state’s Medicaid agency, with contact information available through from Healthcare.gov.

Once a person is deemed eligible for Medicaid, he may receive health care and related services for free from any medical provider that accepts the program.

The Patient Protection and Affordable Care Act (PPACA)

Most often referred to as the Affordable Care Act (ACA) and colloquially deemed “Obamacare,” this statute was signed into law by President Barack Obama in 2010. The law states that all legal residents and citizens of the United States with incomes up to 133% of the poverty line qualify for coverage in Medicaid-participating states. While the law has worked to expand both federal funding and eligibility for Medicaid, the U.S. Supreme Court ruled that states are not required to participate in the expansion in order to continue receiving already established levels of Medicaid funding.

As of January 2016, the District of Columbia and 31 states have expanded Medicaid. They are: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Vermont, Washington and West Virginia.

Alabama and South Dakota are considering expansion. The remaining 17 states, as of 2016, have chosen not to participate in the Medicaid expansion.

RELATED TERMS
  1. State Medicaid Program

    Health initiatives managed by state governments in conjunction ...
  2. U.S. Centers for Medicare and Medicaid ...

    The federal agency that administers the nation’s major healthcare ...
  3. Affordable Care Act

    A federal statute signed into law in March 2010 as a part of ...
  4. Custodial Care

    Non-medical care that helps individuals with his or her activities ...
  5. Elder Law

    Elder law is a legal specialty focusing on the rights and needs ...
  6. Health Insurance

    A type of insurance coverage that pays for medical and surgical ...
Related Articles
  1. Insurance

    Medicaid Vs. Long-Term Care Insurance

    These are not equal. Here's why you need to think twice before relying on the government-sponsored program.
  2. Financial Advisor

    Qualifying for Medicaid: How to Better Your Chance

    Getting started on Medicaid can be very difficult, so here are four steps that should increase your chances of getting accepted into the program.
  3. Financial Advisor

    How to Help a Client Qualify for Medicaid

    Figuring out Medicaid eligibility can be very complicated—here are some steps to help you assist clients with qualifying for the program.
  4. Insurance

    Medicaid Vs. Medicare

    Medicare and Medicaid only sound similar. Medicaid doesn't require being 65 or disabled to get benefits. Some low-income seniors can qualify for both.
  5. Retirement

    How Medicaid Works After Retirement

    Reasons why, after you retire, you need to know how Medicaid works – and especially how it relates to Medicare.
  6. Insurance

    Medicare Vs. Medicaid

    Medicare and Medicaid are often confused with one another, because they are both public health-care programs. This confusion likely arises from the similarities between the two programs. After ...
  7. Managing Wealth

    Asset Protection Trusts: Help For Seniors

    How to use an irrevocable trust to qualify a senior for Medicaid and still preserve a portion of assets to support a spouse or other dependents.
  8. Investing

    Protect Your Home From Medicaid Liens

    Plan ahead for long-term care needs to protect your home and your estate.
  9. Insurance

    Trends Driving Managed Care M&A

    The uncertainty introduced by legislation has many managed care companies worried about potential financial losses. Companies are turning to M&A to offset their fears.
  10. Insurance

    What If Obamacare Is Repealed?

    During the campaign, Donald Trump promised to repeal Obamacare. If, as president, he follows through, how will that affect Americans?
RELATED FAQS
  1. What is long-term care?

    Long-term care refers to a collection of services that are intended to meet the medical and non-medical needs of disabled ... Read Answer >>
  2. How does the role of Medicare/Medicaid affect the drugs sector in the U.S.? (UNH, ...

    Read about the impact of Medicare and Medicaid on the drugs sector in the United States and how some doctors get rich by ... Read Answer >>
Hot Definitions
  1. Run Rate

    1. How the financial performance of a company would look if you were to extrapolate current results out over a certain period ...
  2. Hard Fork

    A hard fork (or sometimes hardfork) is a radical change to the protocol that makes previously invalid blocks/transactions ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  4. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  5. Zero Day Attack

    Zero Day Attack is an attack that exploits a potentially serious software security weakness that the vendor or developer ...
  6. Effective Tax Rate

    The average rate at which an individual or corporation is taxed. The effective tax rate for individuals is the average rate ...
Trading Center