Medicaid

3/25/2022

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Health Program

Medicaid—a federal/state partnership with shared authority and financing—is a health insurance program for low-income individuals, children, their parents, the elderly and people with disabilities. Although participation is optional, all 50 states participate in the Medicaid program with significant variation across states in spending, eligibility, covered services and other program features. Once certain minimum federal standards are met, each state determines how its program is administered, who to cover, what services to cover, and how providers are paid.

Medicaid Matters:

Over its 50-year history, Medicaid has represented a critical and evolving issue for state policymakers. Approximately one in five Americans received coverage through Medicaid in 2015, making it the largest source of coverage for low-income children, adults and people with disabilities. In 2016, Medicaid accounted for 21.5 percent of expenditures from state general funds. Across the nation, state spending on Medicaid totaled $509 billion in 2015, of which 62 percent was financed by the federal government and 38 percent by states.

Medicaid in the States:

The Affordable Care Act (ACA) expanded both eligibility for, and federal funding of Medicaid and gave states the option of expanding Medicaid eligibility for all low-income adults with incomes up to 133 percent of federal poverty guidelines. Given this choice, many states have been weighing the costs and savings associated with expanding Medicaid. As of May 2017, 32 states and the District of Columbia had expanded Medicaid, most recently Virginia. Maine expanded Medicaid by citizen's ballot initiative, but it has not been implemented to date, and several states negotiated variations on expansion by waivers or state plan amendments.

States also have adopted various strategies to improve the value and outcomes of their Medicaid programs. To improve quality, states have aligned incentives with their desired outcomes and experimented with new payment models, such as attaching provider payments to patients’ health outcomes. They have also adopted new delivery systems by creating medical homes and streamlining services for those eligible for both Medicaid and Medicare.