Medicaid (General/Federal)

Medicaid is a joint federal and state health insurance program that provides free or low-cost coverage to millions of low-income Americans, including children, pregnant women, elderly adults, and people with disabilities. It is the largest source of health coverage in the United States, covering over 90 million people.

The federal government establishes minimum requirements for Medicaid, but each state administers its own program with its own name, eligibility rules, and benefits. Under the Affordable Care Act, states were given the option to expand Medicaid to cover all adults with incomes up to 138% of the Federal Poverty Level (FPL). As of 2025, 40 states plus the District of Columbia have adopted Medicaid expansion.

Medicaid is funded jointly by the federal government and state governments. The federal government pays at least 50% of Medicaid costs (more for expansion populations at 90%), with the exact share determined by each state's per capita income through the Federal Medical Assistance Percentage (FMAP).

What Medicaid Covers (Mandatory Benefits)

• Inpatient and outpatient hospital services
• Physician and nurse practitioner services
• Laboratory and X-ray services
• Nursing facility services for adults aged 21+
• Home health care services
• Family planning services and supplies
• Federally Qualified Health Center (FQHC) and Rural Health Clinic services
• Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) for children under 21
• Transportation to medical appointments (non-emergency medical transportation)

Common Optional Benefits (Vary by State)

• Prescription drugs (covered by all states but technically optional)
• Dental care for adults
• Vision care and eyeglasses
• Physical therapy and rehabilitation services
• Prosthetic devices
• Chiropractic services
• Personal care services and home and community-based services (HCBS)

Who Qualifies for Medicaid

Eligibility is based on income, household size, disability status, and other factors. Rules vary by state, but federal minimums include:

• Children: Generally up to 138% FPL (about $43,056 for a family of 4 in 2025)
• Pregnant Women: Up to 138% FPL in most states (some states cover up to 200%+ FPL)
• Parents/Caretaker Relatives: Income thresholds vary widely by state
• Adults (Expansion States): Up to 138% FPL (~$20,783/year for an individual in 2025)
• Elderly and Disabled: SSI recipients automatically qualify in most states
• Medically Needy: People with high medical expenses who "spend down" to eligibility levels

In non-expansion states, childless adults generally do not qualify for Medicaid regardless of income, creating a "coverage gap" for those earning too much for Medicaid but too little for marketplace subsidies.

Medicaid Costs

• Premiums: Most Medicaid beneficiaries pay no premiums. Some states charge small premiums for certain expansion populations (typically $10-$25/month).
• Copays: Minimal or none. Federal rules cap copays at nominal amounts (e.g., $4 for outpatient visits, $8 for hospital stays). Children under 18 and pregnant women are exempt from copays.
• Deductibles: Generally none
• Out-of-Pocket Maximum: Total cost-sharing for a family cannot exceed 5% of household income
• No balance billing: Providers cannot charge Medicaid patients more than the Medicaid-approved amount

Medicaid is often the most affordable health coverage available, with most enrollees paying nothing or very little for comprehensive medical services.

How to Enroll

Unlike Medicare, Medicaid has no limited enrollment periods. You can apply at any time of year.

• Online: Apply through your state's Medicaid website or through HealthCare.gov (the marketplace application will check Medicaid eligibility)
• By Phone: Call your state Medicaid office or 1-800-318-2596 (Marketplace)
• In Person: Visit your local Department of Social Services, community health center, or Medicaid office
• By Mail: Download and mail a paper application from your state Medicaid agency

Applications are typically processed within 45 days (90 days for disability-based applications). Coverage can be retroactive up to 3 months before the application date if you would have been eligible during that period.

Pros

• Free or very low-cost comprehensive health coverage for eligible individuals
• No enrollment periods — apply anytime year-round
• Covers essential services including transportation to appointments
• Comprehensive coverage for children through EPSDT with no cost-sharing
• Retroactive coverage up to 3 months protects against gaps
• Covers long-term care services that most insurance does not

Cons

• Income eligibility limits are strict and vary significantly by state
• Not all providers accept Medicaid due to lower reimbursement rates
• Benefits vary by state — dental, vision, and other services may be limited
• In non-expansion states, many low-income adults are ineligible
• Medicaid estate recovery may require repayment from estates of deceased beneficiaries (for those 55+)
• Frequent eligibility redeterminations can result in coverage gaps