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What is Medicaid?

Updated on June 26, 2009

Today, the costs of medical care can be very high, often to the rate that they are completely unaffordable without insurance. In many regards this is a sad testament to the way our medical industry is set up in the United States.

For low income families, Medicaid provides a way to receive medical insurance, although more than 60% of poverty stricken Americans do not qualify for this service.

A Brief Background on Medicaid

Medicaid was created as part of the Social Security Act in 1965. It was designed as a means of offering low income families, single mothers, people with disabilities, and single individuals a way to afford health care. Medicaid is an optional program, but since the 1980's, all 50 states have participated in it. Arizona was the last state to create a Medicaid program.

Who Administers Medicaid Programs?

Even though each individual state runs their own Medicaid Program, the federal government provides funding for part of the service. Each state has their own Medicaid office, although the actual name can vary by state, but on the federal side, the Center for Medicare and Medicaid Services (CMS) ensures that the states programs meet federal requirements. If a state fails to meet federal requirements, then they risk loosing their funding.

Many states have adapted programs that are funded by the state and federal government, but actually ran by private insurance companies. One such example is Vermont, which contracts out a number of their state health care programs, including Medicaid. Other states will group all of their health care programs into a single branch, which allows for a central office to help administer all of their programs.

As a result to the many different ways that states can adhere to federal Medicaid regulations, there tends to be differences between each states programs. This means that state by state, while the Medicaid plans have the same overall coverage, how they achieve this coverage actually varies. As a result, it is necessary to visit the actual states website to find out the exact coverage rules and requirements.

To find your states Medicaid office, you can visit this Medicaid Website Directory and select your state from the list.

What is Covered by Medicaid?

Medicaid is aimed at providing affordable health care for low income families and does not only cover standard medical costs, like doctors visits and hospital stays. Medicaid also covers dental expenses, as well as prescription medicines.

Medicaid also covers the cost of home medical equipment, which is usually referred to as durable medical equipment. Durable medical equipment consists of things like wheelchairs, hospital beds, and oxygen equipment, although what is covered and how it is covered varies by each state. Some items, like Medicaid Lift Chairs, vary greatly in how they are covered state by state, but more common types of medical equipment, such as eyeglasses, are more uniformly covered by Medicaid.

Medicaid also covers nursing home expenses, although this can also vary state by state, with these expenses accounting for the most rapid increase in Medicaid Costs.


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  • Tamarii2 profile image

    Tamarii2 8 years ago from NEW YORK

    Enjoyed reading this.Thanks.It's useful information.Thank you for answering one of my questions.Enjoy your journey with great peace.

  • brad4l profile image

    brad4l 8 years ago from USA

    @Nicomp, yep that is what I was getting at, thanks.

  • nicomp profile image

    nicomp really 8 years ago from Ohio, USA

    I think your first paragraph should read "completely unaffordable" rather than "completely affordable" ?

  • melshomecorner profile image

    Melinda Winner 8 years ago from Mississippi

    Great Hub, there are more families that need this now than ever.

  • profile image

    Useful Knowledge 8 years ago

    Medicaid is a good thing for low income families. There are so many Americans that can't afford health insurance. Great hub.