In January, throughout a congressional listening to on his approach to changing into secretary of the Division of Well being and Human Companies, Robert F. Kennedy Jr. bought fundamental particulars improper about Medicaid — a program he now oversees.
He mentioned that Medicaid is totally funded by the federal authorities (it’s not) and that many enrollees are unhappy with excessive out-of-pocket prices (enrollees pay restricted, if any, out-of-pocket prices).
Medicaid is complicated. The $880 billion-a-year state-federal program gives well being protection to thousands and thousands of disabled and low-income People. This system covers completely different companies for various folks in several components of the nation — and enrollees might work together with non-public insurance coverage firms with out “Medicaid” of their names, leaving some unaware that they’re on this system in any respect.
Though President Donald Trump promised to “love and cherish” Medicaid, Republicans in Congress final week introduced federal funds proposals that would dramatically curtail this system. As that debate begins, here’s what it is advisable to learn about Medicaid.
What’s Medicaid, and the way is it completely different from Medicare?
Medicaid and Medicare had been created by the identical laws — an addition to the Social Safety Act — that was signed into regulation by President Lyndon B. Johnson in 1965.
Medicaid is a authorities medical insurance program for folks with low incomes and adults and kids with disabilities.
Medicare, in contrast, typically covers these 65 or older.
For older People with low incomes, Medicaid covers out-of-pocket prices for Medicare. Such individuals are generally referred to as “twin eligibles,” as a result of they qualify for each packages.
Who’s on Medicaid?
Greater than 79 million folks obtain companies from Medicaid or the carefully associated Youngsters’s Well being Insurance coverage Program. That represents about 20% of the overall inhabitants of the USA. Most enrollees qualify due to low incomes.
About 40% of all kids within the nation are lined by Medicaid or CHIP, created in 1997. Each pay for companies corresponding to routine checkups, vaccinations, and hospital stays. Medicaid additionally covers pregnant folks earlier than and after they provide beginning and pays for greater than 40% of all births.
Medicaid additionally covers folks with disabilities or complicated medical wants and helps them afford companies that enable them to stay independently in group settings, exterior of establishments corresponding to nursing properties and state-run hospitals.
This system serves a various cross part of the nation. About 40% of individuals below 65 who use Medicaid are white, 30% are Hispanic, 19% are Black, and 1% are Indigenous folks.
Federal Medicaid {dollars} can’t be used to cowl immigrants who’re within the U.S. with out authorized permission, although some states, in addition to Washington, D.C., have used their very own funds to increase Medicaid protection to such people. California was the primary state to take action.
What are the earnings {qualifications}?
Eligibility typically depends upon whether or not an individual is low earnings, and states have other ways of defining that. For a four-adult family with out dependent kids, the present nationwide median protection degree is $44,367.
The Reasonably priced Care Act, typically referred to as Obamacare, which handed in 2010, allowed extra folks to qualify for Medicaid on the premise of earnings. That is what is called “Medicaid enlargement.”
The regulation supplied states a large incentive so as to add extra folks to their packages: The federal authorities would pitch in more cash per enrollee to assist cowl them.
The intention behind the enlargement was to shut gaps in medical insurance packages for the thousands and thousands of People who don’t get protection by way of an employer. Medicaid would cowl folks with extraordinarily low incomes, and as their incomes rose, they might transfer to backed well being plans bought by way of the Reasonably priced Care Act’s exchanges.
In 2012, the U.S. Supreme Court docket mentioned the choice of whether or not to increase this system can be left as much as particular person states. At this time, 40 states and the District of Columbia — led by Democrats and Republicans alike — have opted in.
Within the 10 states that haven’t expanded Medicaid to extra low-income adults, the median earnings qualification degree is $5,947 a 12 months for a single-person family in 2025. Those that make extra should not eligible.
Adults in these states who make an excessive amount of for Medicaid may also make too little to qualify for assist shopping for plans on the Reasonably priced Care Act exchanges, leaving some unable to afford protection. An estimated 1.5 million fall into this protection hole.
The place does the cash to pay for it come from?
The federal authorities pays most of the price of Medicaid by matching a portion of what states spend.
At the moment, the federal authorities matches at the least 50% of state spending and gives states more cash for some companies and enrollees — as an illustration, for kids and pregnant girls.
Much less rich states — decided by contemplating residents’ per capita incomes — obtain the next match, translating to the next share of federal {dollars}. In Mississippi, as an illustration, the federal authorities picks up 77% of the price of Medicaid.
States additionally obtain a 90% match from the federal authorities for enrollees eligible for Medicaid below the ACA’s enlargement.
There isn’t any restrict on how a lot states can spend on this system, and a whole bunch of billions of federal {dollars} circulate into states annually. In 2023, states spent about 15% of their very own budgets on Medicaid.
What does that cash pay for?
Federal regulation requires all state Medicaid packages to cowl sure companies, together with emergency medical transportation, X-rays and lab work, household planning, and medication-assisted therapy for folks with opioid use dysfunction. This system additionally covers many nursing and residential well being companies, although federal regulation permits these advantages to be clawed again after an enrollee’s dying.
Past that, states have the pliability to decide on the companies their Medicaid packages cowl. All states cowl prescribed drugs, and most cowl eyeglasses, some dental care, and bodily remedy.
Medicaid covers extra psychological well being and long-term care companies than some other kind of insurance coverage, public or non-public.
What’s Medicaid referred to as in my state?
Medicaid packages can go by many alternative names, even throughout the identical state, partially as a result of most states use non-public insurance coverage firms to run them. This may be complicated for shoppers who might not notice they’re really enrolled in Medicaid.
In New York, as an illustration, Medicaid plans are supplied by main firms, corresponding to Anthem Blue Cross Blue Protect and UnitedHealthcare — and a few chances are you’ll not have heard of, corresponding to Amida Care and MetroPlusHealth. In Wisconsin, enrollees could also be in BadgerCare Plus; in Connecticut, Husky Well being; in Texas, STAR; and in California, Medi-Cal.
How does Medicaid have an effect on hospitals and docs in my state?
Medicaid typically pays well being care suppliers corresponding to docs and hospitals much less cash for companies than Medicare or non-public insurance coverage does. However it may be more cash than they’d get caring for people who find themselves uninsured — and with out Medicaid, many extra People can be uninsured.
Like states, suppliers and hospitals have come to depend on this cash and categorical considerations that even phasing it out over time would require main changes.
What’s going to occur to Medicaid?
It’s not clear. Republicans in Washington are once more pushing for main modifications, which may take the type of cuts to federal funding. That might scale back the quantity of people that qualify, the companies obtainable, or each. An identical push targeted on repealing and changing Obamacare in 2017, throughout Trump’s first time period, was unsuccessful.
Maybe one of many largest obstacles to altering Medicaid is its reputation: 77% of People — and majorities of Democrats, independents, and Republicans — view this system favorably.
On the coronary heart of all of it are key questions concerning the function of presidency in folks’s well being: How large ought to the U.S. medical insurance coverage security internet be? Who deserves authorities help? And the way will enrollees, states, suppliers, and the well being care system at massive take up main modifications to Medicaid, even when a rollout had been staggered?