Is Medicaid a state and federal partnership?

Medicaid, a joint program between federal and state governments, provides coverage of health and long-term care for low-income adults, pregnant women and children. Enrollment in the program increased by 15.5 percent during the pandemic to over 82 million in 2021.

Spending on the program represented roughly $1 out of every $6 spent on health care in the US with a total expenditure of more than $672 billion in 2020. Funding is split between states and the federal government, but the program is administered by states within broad federal rules.

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How Medicaid is funded

One of the main tenants of Medicaid is that the federal government guarantees funding for the program. State spending for eligible beneficiaries and qualifying services is at least matched equally by the federal government without a limit.

In order to guarantee coverage and care to Americans in poorer states the federal government uses a formula to pay a larger share of costs in those states. In 2020, the federal government share of Medicaid spending was 67 percent of total costs with the states paying 33 percent.

Who can participate in Medicaid?

Another main tenant of Medicaid is that Americans who meet the eligibility requirements for the program are guaranteed coverage. States can determine which populations are eligible to be covered under the program. Generally, it is targeted toward adults, expecting mothers and children who are low-income. But the disabled and seniors can be included as well.

The income limits to be eligible vary by state and eligibility group. However, the Affordable Care Act (ACA) allocated funding for states to expand coverage to “nonelderly adults with income up to 133% of the federal poverty level.”

What does Medicaid cover?

States administer Medicaid programs and are subject to broad national standards requiring that they cover certain mandatory services. However, they have flexibility over how their program is run. This means there is a complicated and diverse landscape of plans from state to state.

All 50 states and the District of Colombia, as well as US territories offer Medicaid. The Medicaid expansion under the ACA was available to all but the Supreme Court made it essentially optional in 2012. Millions are still without coverage in the 12 states that still have not expanded their programs. They include Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina, South Dakota, Tennessee, Texas, Wisconsin, and Wyoming.

If states would like to offer additional services, they can. States can implement experimental, pilot, or demonstration projects that the Secretary of Health and Human Services determines promote program objectives by obtaining a waiver under Section 115.

What must be covered under Medicaid?

Federal governments mandate that all states must provide Medicaid plans that cover the following: