Medicaid is the largest publicly financed health insurance program for people with low incomes in the U.S. It is a means-tested program, meaning eligibility is based on income and assets. It was enacted in 1965 as a national social insurance program to help low-income families and individuals obtain and pay for medical care. It is funded jointly by the federal government and states, but the states manage it.
In 2022, Medicaid programs served over 80 million beneficiaries. Medicaid enrollees can obtain covered medical services from providers who meet state Medicaid requirements and agree to participate in the program. These include physicians, hospitals, nursing facilities, home- and community-based service providers, behavioral health, and dental and vision providers, among others.
The federal government sets minimum requirements for Medicaid program benefits that states must meet. However, states do have flexibility in administering the program. For example, they can set eligibility requirements and provide benefit packages that exceed the federal minimum.
Over 12 million beneficiaries qualify for and are enrolled in both Medicare and Medicaid. For these “dually eligible” beneficiaries, Medicaid pays for cost sharing and benefits not covered by Medicare.
States have increasingly employed managed care in Medicaid programs. As of 2021, 41 states (including the District of Columbia) offer some form of managed care option. And 90 percent of Medicaid beneficiaries are enrolled in some type of managed care.
Medicaid enrollment has seen a sharp increase in the last few years. From February 2020 to March 2022, enrollment grew by 25.4 percent. That translated into 16.4 million new enrollees. During the COVID-19 public health emergency, states have not been allowed to disenroll Medicaid beneficiaries, which heavily contributed to this increase. Once the health emergency ends on May 11, 2023, states will resume eligibility redeterminations and disenrollment. It is anticipated that a large number of beneficiaries will be disenrolled as a result, leaving many without coverage.
Medicaid is a critical part of the safety that serves people from many diverse communities. Despite all states having to meet minimum federal standards, outcomes are not the same for all beneficiaries. Researchers have found that individuals from groups that have been discriminated against overall have worse outcomes than white beneficiaries.