Overview

Medicaid is a publicly funded health coverage program in the United States managed by state governments under broad federal rules. It is designed to provide medical and long‑term services to people with limited income and resources. Funding is shared between the federal government and the states, and each state operates its own program with some flexibility over eligibility, benefits, and provider payment methods.

How the program is structured

Medicaid combines federal standards with state administration. The federal government sets minimum eligibility categories and required benefits; states may add optional services and expand eligibility above federal minimums. The federal share of costs (known as the Federal Medical Assistance Percentage or FMAP) varies by state according to a statutory formula. States may deliver services through fee‑for‑service systems, managed care organizations, or a mix of both. Waivers and demonstration programs allow states to test alternative designs under federal approval.

Who is eligible

Eligibility categories include low‑income families with children, pregnant people, older adults, people with disabilities, and certain foster care and adoption assistance populations. Since the Affordable Care Act (ACA), many states have chosen to expand adult eligibility to people with incomes up to roughly 138% of the federal poverty level, although expansion remains optional in some states. Millions of people are enrolled nationally, including children and adults; many older adults and people with disabilities who also qualify for Medicare are enrolled as "dual eligibles."

Typical services and benefits

Medicaid covers a broad range of health services. Some benefits are required by federal law and others are optional for states. Commonly covered items include:

  • Hospital and physician services
  • Laboratory tests and imaging
  • Prescription drugs (varies by state)
  • Preventive and primary care, including services for children under the EPSDT (Early and Periodic Screening, Diagnostic, and Treatment) benefit
  • Long‑term services and supports (LTSS), including nursing facility care and many home‑and‑community‑based services

Long‑term care and personal care services are a major area where Medicaid differs from other programs; it is the largest public payer for nursing home and community‑based long‑term supports in the United States.

History and policy developments

Medicaid was created in 1965 alongside Medicare as part of major social legislation. Over decades it has expanded through additional eligibility categories, mandates (such as EPSDT for children), and state innovations. The ACA in 2010 offered a broad expansion of adult coverage; many states adopted the expansion, which significantly increased enrollment and federal funding for participating states. Other policy debates and changes continue, including state waiver projects and ongoing discussions about program financing and benefit design.

Notable distinctions and contemporary issues

Medicaid differs from Medicare in purpose and population: Medicaid targets low‑income people of all ages and commonly covers long‑term care, while Medicare primarily serves people age 65 and older and certain younger people with disabilities. Current issues include variability across states in eligibility and benefits, the fiscal pressures of aging populations, access to providers, and the role of managed care. Because Medicaid is administered state‑by‑state, experiences and coverage levels can vary substantially depending on where a person lives.

Overall, Medicaid functions as the United States’ principal safety‑net program for health care and long‑term supports, serving tens of millions of people and connecting many low‑income families and individuals to essential medical services.