Medicaid is a partnership between federal and state governments that provides free or low-cost health insurance coverage for low-income people, senior citizens, people with disabilities, and some children. Children may also be covered by the Children's Health Insurance Program (CHIP). Medicaid is currently the largest provider of health insurance to low income individuals in the U.S.
The health services and benefits provided by Medicaid vary by state but typically include primary care, outpatient and inpatient hospital services, lab tests, x-ray services, and prescription drug coverage. Programs also may include coverage of women's’ health issues including breast and cervical cancer screening and treatment as well as various options for pregnant women.
Currently 72.5 million Americans are covered by Medicaid and CHIP, including children, pregnant women, parents, seniors and individuals with disabilities. Federal law requires states to cover certain population groups (mandatory eligibility groups) and gives them the flexibility to cover additional populations (optional eligibility groups).
Each state has their own Medicaid eligibility standards but most states offer coverage for adults with children that do not exceed a specified level of income. This income ceiling is usually expressed as a percentage of the Federal Poverty Level (FPL). Other groups can be determined eligible by non-financial standards such as participation in the Supplemental Security Income (SSI) program. The Affordable Care Act will expand Medicaid coverage to nearly all low-income individuals under age 65 with incomes at or below 138% of poverty ($29,974 for a family of three in 2020).
Medicaid is often confused with Medicare, the health insurance program for the elderly. However, there are millions of individuals who are simultaneously enrolled in both healthcare programs. These individuals are known as “dual eligible.” This group tends to be poor and report a lower health status than the average enrollee in Medicaid or Medicare alone. Dual eligible qualify for various premium and out-of-pocket cost reductions through the Low Income Subsidy, otherwise known as Extra Help.
Not all doctors accept Medicaid. A HealthPocket survey, conducted in May of 2013, found that about 43% of health providers nationwide, including doctors, counselors, therapists and other healthcare professionals accept Medicaid as a payment option. Generally, Medicaid reimbursement paid to physicians and other medical personnel has been lower than the fees paid by private insurers and Medicare for the same services. This may explain the low percentage of Medicaid acceptance nationwide.
It has been suggested that the ACA expansion of Medicaid eligibility guidelines as well as the optional state-level Medicaid expansion will create a shortage of healthcare professionals that accept Medicaid patients. The federal government has approved a temporary two-year increase in Medicaid reimbursement fees as an incentive for physicians to accept these new patients. The actual impact of the Medicaid expansion on physician availability remains to be seen.
Most states are now using a managed care delivery system where enrollees receive their Medicaid services from an organization under contract with the state. There are three types of systems that states may use either separately or in combination.
Managed Care Organizations (MCOs) are similar to HMOs and provide most Medicaid services directly to enrollees. Limited Benefit Plans offer specialized Medicaid services like mental health or dental care. Primary Care Case Managers are the primary provider of services to enrollees and coordinate referrals and other specialized services.
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