Topics

Learn more about each topic by clicking on the title name.

People

Medicaid covers people who would otherwise face considerable financial barriers to health care. Generally, a person must fall into a specific population group, referred to as categorical eligibility, and meet income thresholds in order to be eligible for Medicaid. Federal law mandates some of these eligibility groups; some are covered at state option. All states offer Medicaid coverage for low-income children, their parents, expectant mothers, seniors, and people with disabilities; some states have opted to expand eligibility further. To receive a full range of Medicaid benefits, individuals also must be U.S. citizens or qualified aliens. Learn more about eligibility pathways, eligibility and enrollment processes, and issues pertaining to specific populations.

Benefits

Medicaid covers routine health services as well as benefits that are limited or not typically covered under other health insurance plans such as long-term services and supports, translation assistance, and non-emergency transportation services that are important to low-income seniors, adults with disabilities, and children with special health care needs. There are also specific rules affecting use of cost sharing and premiums. Learn more about Medicaid benefits.

Financing

The federal government and the states share responsibility for financing Medicaid. Historically, the federal share has averaged about 57 percent. With the new adult group under the Medicaid expansion receiving 100 percent federal match, the average federal share has increased to over 60 percent starting in 2014 (OACT 2016). General revenues fund federal spending for Medicaid, in contrast to Medicare, where funds in large part come from dedicated revenue sources that include payroll taxes and beneficiary premiums. Funding for the nonfederal, or state, share of Medicaid comes from a variety of sources; at least 40 percent must be financed by the state and up to 60 percent may come from local governments. In state fiscal year 2012, 69 percent of funds came from state general revenues, 16 percent from local governments (including intergovernmental transfers and certified public expenditures), 10 percent from health care related taxes, and 5 percent from other sources (GAO 2014).

Payment and Delivery Systems

States may offer Medicaid benefits on a fee-for-service (FFS) basis, through managed care plans, or both. Under the FFS model, the state pays providers directly for each covered service received by a Medicaid enrollee. Under managed care, the state pays a fee to a managed care plan for each person enrolled in the plan. In turn, the plan pays providers for all of the Medicaid services an enrollee may require that are included in the plan's contract with the state. Learn more about how Medicaid programs pay providers and structure the delivery of care.

For a summary of major Medicaid payment policy developments, click here.

Spending

In fiscal year (FY) 2015, total Medicaid spending was $556 billion. Of this amount, $351 billion was federal spending and $205 billion was state spending. This represents:

  • 16.4 percent of U.S. health care spending (2014),
  • 9.5 percent of federal outlays (FY 2015),
  • 61 percent of spending on long-term services and supports (2012), and
  • 26 percent of spending on mental health and substance abuse (2009).

Go to our MACStats data book for the most recent detailed data on spending including trends and information broken out by state and eligibility group.

Access and Quality

One of the key tests of the effectiveness of a health care coverage program is whether it provides access to appropriate health care services in a timely manner and whether those services promote health improvements. Learn more about MACPAC's work on how Medicaid and CHIP enrollees use health services.

Program Administration

The Centers for Medicare & Medicaid Services (CMS) and the individual states and territories jointly administer Medicaid and the State Children’s Health Insurance Program (CHIP). CMS is responsible for program administration at the federal level. CMS approves state plans and state plan amendments, waivers, and demonstration programs; enforces compliance; and provides guidance to states.

Medicaid and Other Payers

Medicaid interacts with other payers when Medicaid beneficiaries have other sources that are legally liable for payment of their medical costs. These may include private insurance, Medicare, other public programs such as the Ryan White program, workers’ compensation, and amounts received for injuries in liability cases. The program also interacts with CHIP when states provide Medicaid coverage to beneficiaries using CHIP funds.

The Affordable Care Act and Medicaid

Perhaps the most widely discussed change that the Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) made to Medicaid was expanding eligibility to adults with incomes up to 138 percent of the federal poverty level (FPL). Originally a requirement, the Supreme Court ruling in June 2012 effectively made the Medicaid expansion an option, and to date, more than half of states have opted to expand. The ACA also made a number of other significant Medicaid changes, such as preventing states from reducing children’s Medicaid eligibility until FY 2019; setting a uniform standard for children’s eligibility at 138 percent FPL; streamlining eligibility, enrollment, and renewal processes; and updating payments to safety-net hospitals.

CHIP

The State Children's Health Insurance Program (CHIP) is a joint federal-state program established to provide coverage to uninsured children in families whose incomes are too high to qualify for Medicaid. In fiscal year (FY) 2015, 8.4 million children received CHIP-funded coverage. Spending for FY 2015 totaled $13.7 billion ($9.7 billion federal, $4.0 billion state). Under current law, CHIP allotments are provided through FY 2017. Learn more about CHIP and MACPAC's analysis of its future.