What is Medicaid and what does it cover?

Medicaid is a federal and state program that provides health care coverage to people who qualify. Each state runs its own Medicaid program, but the federal government has rules that all states must follow. The federal government also provides at least half of the funding for their Medicaid requirements.

Based on federal regulations, states create and run their own Medicaid program to best serve their residents who qualify. States may choose to provide more services than the federal government requires and they may also choose to provide coverage to larger groups of people. Medicaid provides health care coverage for people who qualify, based on income and the value of what they own.

Medicaid began as part of the Social Security Act of 1965. The original law gave states the option of receiving federal funding to help provide health care coverage to children whose families have a low income, their caregiver relatives, people who are blind and people who are disabled. Over time, the federal government has strengthened the rules and requirements for state Medicaid programs.

Medicaid programs serve specific groups of people, including:

• Pregnant women with low income
• Children of low-income families
• Children in foster care
• People with disabilities
• Seniors with low income
• Parents or caregivers with low income

States can also choose to expand eligibility to other groups, such as people with low income who may or may not have children.

CHIP, which stands for Children’s Health Insurance Program, provides low-cost insurance for children whose families do not meet the income eligibility requirements for Medicaid. CHIP may also provide coverage for pregnant women in some states, but does not cover adults caring for children who qualify for CHIP.

Each state decides the full range of benefits that it covers under Medicaid. Federal law requires that states must provide certain benefits, which are called mandatory benefits. States may also choose to offer other benefits and services by Medicaid. These are called optional benefits. The chart below shows what are mandatory benefits and what are optional Medicaid benefits.

*This includes services furnished in a religious nonmedical health care institution, emergency hospital services by a non-Medicare certified hospital, and critical access hospital (CAH) Medicaid prescription drug coverage.

Prescription drug coverage is an optional benefit under federal Medicaid law. But, as of 2020, all states include some form of prescription drug coverage under their Medicaid program. In general, most enrollees within a state Medicaid program will get prescription drug coverage.
 

Medicaid programs may also cover a variety of different Home- and Community-Based Services (HCBS) to help people stay living at home and active in the community. The level of support provided is typically based on the needs of the individual.

Examples of the types of home health care and residential senior care services provided as part of HBCS programs include:

• Personal care like showering
• Transportation services
• Skilled nursing care
• Occupational, speech and physical therapy
• Managing diet and nutrition (healthy eating)
• Home-delivered meals
• Home chores and housekeeping

Some HCBS services like skilled nursing care and occupational, physical or speech therapy are delivered by qualified and, in some cases, licensed professionals. Other services, such as doing chores around the house and making meals, can be provided by family members, friends or paid caregivers.

Because each state manages its own Medicaid program, eligibility varies from one state to another. If you have questions about qualifying, contact your state Medicaid agency. Or, apply online at the website for your state Medicaid agency to see if you qualify.

A Dual Special Needs Plan (or dual-eligible health plan) is a type of health insurance plan for people who have both Medicaid and Medicare. These people are “dual-eligible” because they’re eligible to receive Medicaid benefits as well as Medicare benefits.

Dual Special Needs Plans provide extra help to those who need it. That may be because of income, disabilities, age and/or health conditions. A Dual Special Needs Plan works together with your Medicaid health plan. You’ll keep all your Medicaid benefits. Most dual health plans also give you more benefits and features than you get with Original Medicare. All with as low as a $0 plan premium.* Learn more about dual health insurance plan benefits. 

*Benefits and features vary by plan/area. Limitations and exclusions apply.