Medicaid is a social welfare program designed to provide healthcare coverage for the poor in the United States. Certain people with disabilities can also qualify. Funded both by the federal government and individual state governments, the healthcare program was created to help provide health insurance to people lacking the money or resources to afford coverage. Each state has its own eligibility requirements and policies.
What’s the Difference Between Medicaid and Obamacare?
Medicaid: The health insurance program is provided and run by the government.
Obamacare: This is the nickname for the Affordable Care Act, President Obama’s health care reform bill that became law in 2010. The ACA expanded the Medicaid program and created subsidies so more people could afford health insurance. When people say “I have Obamacare,” what they actually mean is “I’m covered by a health plan made available through Obamacare.” The government doesn’t run Obamacare plans, but it helps you find affordable coverage through its health insurance exchange (HealthCare.gov’s “Marketplace” or the state health insurance exchange or marketplace, if your state runs its own). In some cases, though, you may qualify for an Obamacare subsidy (a tax credit from the government to offset some costs) to help you pay part of your monthly health insurance premiums.
Important to note: plans offered by private insurers through the Marketplace (“on-exchange”) sometimes differ from healthcare plans that those same private insurers offer outside the Marketplace (“off-exchange”). You can read more about those differences and why they’re different here.
Who Is Eligible for Medicaid?
Every state in the United States has its own set of eligibility requirements for Medicaid. Generally, though, in order to qualify you have to belong to one of the following groups:
- Families (parents with dependent children),
- Pregnant women
- People with certain disabilities or serious health conditions
- The elderly (seniors with Medicare may be “dual-eligible” for both plans)
- Children
- Adults with income up to 138% of the poverty level (in 35 states and Washington, D.C.)
In addition, each state considers three factors:
- Your income
- Your household size
- Your citizenship status (must be a U.S. citizen or permanent resident for at least five years, and a resident of the state in which you’ll be receiving Medicaid benefits)
The Medicaid program is “means-tested.” In order for you to qualify for the healthcare benefits under Medicaid, you have to actually provide evidence that you’re poor or that you’re suffering from the disabilities that you claim. Additionally, in the states that haven’t expanded Medicaid under Obamacare, being poor alone doesn’t necessarily mean you’ll qualify for coverage.
HealthCare.com offers a quick tool below to help you figure out if you might qualify for Medicaid. Keep in mind that it’s just a predictor tool and it makes a prediction based on your income alone (at the end of the day, whether you qualify is based on your own state’s eligibility requirements)
What Counts as “Poor”? Are You Poor Enough for Medicaid?
What counts as “poor” will vary from state to state. Generally, some percentage of the federal poverty level (FPL) is used as a guideline for states.
Whether you’re considered poor enough for Medicaid all depends on where your income compares to the FPL and what your state’s eligibility requirements say. You potentially fall into one of three camps:
- If you live in a state that hasn’t expanded Medicaid coverage, and your income is below 100% of the FPL: You may qualify for Medicaid depending on your state’s current eligibility requirements. However, you won’t qualify for premium subsidies or cost-sharing reductions through Obamacare.
- If you live in a state that has expanded Medicaid coverage, and your income is below 138% of the FPL: You qualify for Medicaid based only on your income level.
- If your income is between 139% and 400% of the FPL: Regardless of what state you live in, you probably qualify for premium tax credits that lower your monthly premiums for a health insurance plan under Obamacare. And if you’re in a state that hasn’t expanded Medicaid, you’re eligible for premium subsidies with an income as low as 100% of the poverty level.
What Does Medicaid Cover?
Medicaid coverage varies from state to state, with some states covering more services than others (like prescription drug coverage or dental services), but at minimum, every plan is supposed to cover certain essential services:
- Inpatient and outpatient services;
- Family planning services and supplies;
- Pediatric services (screening, diagnosis, and treatment) for children under 21;
- Laboratory and X-ray services;
- Short-term skilled healthcare services (includes inpatient short-term skilled nursing or rehabilitation facility care, as well as short-term home healthcare provided by a home healthcare agency);
- Physician, midwife, and nurse practitioner visits and services; and
- Rural health clinic and federally qualified health center services.
- Prescription drugs aren’t required to be covered, though many states do cover them under Medicaid. And for people who are enrolled in Medicare and also eligible for an income-based Medicare Savings Program, Medicaid funds are used to cover premiums and cost-sharing for Medicare Part D drug coverage.
Who Pays for Medicaid?
Both your state government and the federal government act as insurers in this case (the ones that will cover the costs of your medical bills). The way it’s set up, the federal government pays at least half of those bills, while the state government pays no more than half of those bills. In some states, Medicaid beneficiaries have to pay small fees for certain services.
