Medicaid is a means-tested entitlement program that is largely designed and administered by states under broad federal rules. The programs are jointly financed by federal and state funds. Federal contributions to each state are based on a state's willingness to finance covered medical services and a matching formula. The Centers for Medicare and Medicaid Services (CMS), within the U.S. Department of Health and Human Services (HHS), is responsible for federal oversight of the program. In FY2003, preliminary federal and state spending on Medicaid reached $275.5 billion, exceeding Medicare payments, net of premiums, by over $15 billion.
Medicaid coverage for non-elderly, non-disabled adults and children is provided to people who qualify through a number of pathways, some of which are required under federal law, others are optional for states. State programs are required to provide coverage to families based on welfare program rules in effect in 1996. Coverage for children goes beyond those often very low financial criteria through a combination of other mandatory and optional pathways. Low income pregnant women can also receive Medicaid coverage through both mandatory and optional pathways. In addition, a number of other optional pathways exist for special groups of people who are not considered disabled because they do not have a disability as defined under the Supplemental Security Income (SSI) program rules. Some of those groups include, for example, certain women with breast or cervical cancer, uninsured individuals diagnosed with tuberculosis, people who become impoverished by their medical costs, and certain immigrants.
Variation across the state-based programs is the rule. Income eligibility levels and services covered vary, and the method for, and amount of, reimbursement for services differ from state to state. Medicaid is targeted to individuals with low-income, but not all of the poor are eligible, and not all of those who are covered are poor. For Medicaid-covered children and families, primary and acute care is often delivered through managed care organizations, while elderly enrollees and those with disabilities more often obtain such care on a fee-for-service basis. In recent years, more and more states have implemented a variety of major program changes using special waiver authority.
This report describes federal Medicaid eligibility rules for children and adults but does not address eligibility pathways for individuals qualifying on the basis of having a disability or for persons who are age 65 and over. This report is one of a number of CRS reports on Medicaid and will be updated periodically. (author abstract)