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. Children’s Health Insurance Program ...

    A medical coverage source for individuals under age 19 whose ...
  3. Custodial Care

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

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

    A type of insurance coverage that pays for medical and surgical ...
  6. Health Insurance Marketplace

    Organizations that facilitate structured and competitive markets ...
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. Managing Wealth

    Medicaid and Nursing Homes: A Quick Guide to the Rules

    Medicaid can cover the costs of a long-term healthcare facility, if you qualify. But that's a big if.
  3. Insurance

    Medicaid vs. CHIP: Understanding the Differences

    Medicaid and CHIP are both designed to provide low-income children with health care coverage. Find out about the differences between the two programs.
  4. 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.
  5. 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.
  6. Financial Advisor

    Long-Term Care: How Medicaid Stacks Up

    Clients who think Medicaid is a good option for long-term care usually don't know the rules that come with the process of applying for it.
  7. Retirement

    Top 5 Strategies To Pay For Elder Care

    The cost of a nursing home, assisted living facility or home care can be ruinous. Try these routes to help seniors qualify for Medicaid and pay the bills.
  8. 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.
  9. Investing

    Protect Your Home From Medicaid Liens

    Plan ahead for long-term care needs to protect your home and your estate.
  10. Retirement

    New Health Bill: Poverty-Level Seniors Could Spend Half of Income on Insurance

    The American Health Care Act, if passed, would strip away some of the protections that make insurance affordable for low-income older adults.
RELATED FAQS
  1. 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. Collateral

    Property or other assets that a borrower offers a lender to secure a loan. If the borrower stops making the promised loan ...
  2. Risk-Return Tradeoff

    The principle that potential return rises with an increase in risk. Low levels of uncertainty (low-risk) are associated with ...
  3. Racketeering

    A fraudulent service built to serve a problem that wouldn't otherwise exist without the influence of the enterprise offering ...
  4. Aggregate Demand

    The total amount of goods and services demanded in the economy at a given overall price level and in a given time period.
  5. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  6. Blue Chip

    A blue chip is a nationally recognized, well-established, and financially sound company.
Trading Center