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Understanding Medicaid

Medicare and Medicaid are important government health insurance programs, but consumers often confuse the two. As major changes are made in Medicare and Medicaid, they become even more confusing. Who are these programs for? What are their eligibility requirements? What services do they cover? Here are some answers.

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What is Medicaid?

Medicaid (the Medical Assistance Program) is a jointly funded, federal-state health insurance program that covers almost 59 million low-income individuals who meet eligibility requirements, including families with children, the elderly and the disabled.

The federal government and the states share the costs of financing Medicaid through tax revenue. Medicaid programs vary from state to state because each state does the following: administers its own program; establishes its own eligibility standards; decides the type, amount, scope, and duration of services; and sets the rates of payment for services. States may also require recipients to pay nominal deductibles, co-insurance or copayments for certain services.

Within federal guidelines, each state sets its own income and asset (or resource) eligibility criteria. For example, a person who is eligible for Medicaid in one state is not necessarily eligible in another. Some states also have a "medically needy" program, in which Medicaid eligibility is extended to higher-income people who have high medical costs. In addition, some children may be eligible for Medicaid even if their parents are not.

State Medicaid programs must provide a broad range of services, including inpatient and outpatient hospital services, physician services, nursing facility coverage and more. Both fee-for-service arrangements and managed care plans are used to deliver Medicaid services.

Who is eligible for Medicaid?

This is a complicated question because qualifying for Medicaid does vary from one state to another. Examining the government's guidelines provides a more thorough explanation. For more detailed information, visit the Health & Human Services' Medicaid Web site.

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