Medicaid Defined

For tens of millions of vulnerable Americans,1 Medicaid is a social safety net that means access to health care. But how does it work and who does it cover?

Medicaid 101

Medicaid provides effective and efficient health insurance for more than one out of every five Americans. Learn more about how it’s funded, who it actually covers, and how it can help families in their times of need.

How to apply

For many Americans, Medicaid is a safety net that acts as symbol of hope. If you’re worried about losing health insurance because you had your hours cut or lost a job, you may now be eligible for coverage under Medicaid.

What is Medicaid?

Medicaid is a government-funded health care coverage program for people with limited income or disabilities. It provides effective and efficient health insurance for one in five Americans.2

Medicaid is a joint state and federal program, which means both state and federal dollars fund health care for Americans receiving Medicaid. The federal government establishes parameters for all states to follow. Each state administers its Medicaid program differently, resulting in variations in Medicaid coverage, eligibility, and enrollment process across the country.3

The Children’s Health Insurance Program (CHIP) was introduced in 1997 to provide health coverage for children whose families do not qualify for Medicaid.

In 2014, the Affordable Care Act (ACA), or Obamacare, gave states the ability to expand Medicaid eligibility. Under the ACA, families with incomes up to 138% of the federal poverty level — that’s $17,236 for a single individual or $29,435 for a family of three — could now be eligible if their state took part in the expansion.4 That means people whose incomes were too high to get Medicaid in the past but still couldn’t afford private insurance may now be eligible for coverage in the expansion states.

To provide Medicaid services, most states contract in some way with private managed care companies, or managed care organizations (MCOs), such as AmeriHealth Caritas. MCOs accept a set per-member-per-month payment from the state. MCOs use that payment to deliver, coordinate, and oversee Medicaid program health care services for their members, as well as address broader concerns like health equity or the social determinants of health. In most cases, MCOs help their members receive better access to care and improved health outcome.5

Learn more about the benefits of a state partnership with MCOs like AmeriHealth Caritas.

The faces of Medicaid

Medicaid supports people from all backgrounds and geographic regions.

  • Able-bodied adults.

    Able-bodied adults and children make up nearly three-quarters of the Medicaid population, but they only receive 40 percent of the funds. The remaining funds cover pregnant women, the elderly, the disabled, and the working poor.6

  • Medicaid's resources.

    The majority of Medicaid’s resources are used to cover the care for people who cannot care for themselves. The elderly and people with disabilities account for about one in four enrollees, but these groups also account for nearly two-thirds of Medicaid spending.7

  • Nonelderly adults with Medicaid.

    Most nonelderly adults with Medicaid who can work, do work. Nearly four out of five nonelderly adults with Medicaid coverage live in working families. Three out of five nonelderly adults with Medicaid coverage work. Some of the industries with the largest number of workers covered by Medicaid include food services, construction, and education.8

Medicaid is particularly important for some of America’s most vulnerable people. It covers:9 

Nearly
half
of all births in the typical state.

45%
of nonelderly adults with physical disabilities and developmental disabilities, such as autism, traumatic brain injury, serious mental illness, and Alzheimer’s disease.

76%
of poor children.

48%
of children with special health care needs.

More than
6 in 10
nursing home residents.

  1. “February 2019 Medicaid & CHIP Enrollment Data Highlights,” https://www.medicaid.gov/medicaid/program-information/medicaid-and-chip-enrollment-data/report-highlights/index.html.
  2. Robin Rudowitz, Rachel Garfield, and Elizabeth Hinton, “10 Things to Know about Medicaid: Setting the Facts Straight,” March 6, 2019, http://www.kff.org/medicaid/issue-brief/10-things-to-know-about-medicaid-setting-the-facts-straight/.
  3. “Program History,” https://www.medicaid.gov/about-us/program-history/index.html.
  4. Tennessee state government, “2019 Federal Poverty Levels for 2020 Health Insurance (48 states + DC),” https://www.tn.gov/content/dam/tn/mentalhealth/documents/FY20_BHSN_FPL_Eligiblity_138_Percent.pdf.
  5. Robin Rudowitz, Rachel Garfield, and Elizabeth Hinton, “10 Things to Know about Medicaid: Setting the Facts Straight,” March 6, 2019, http://www.kff.org/medicaid/issue-brief/10-things-to-know-about-medicaid-setting-the-facts-straight/.
  6. Ibid.
  7. Ibid.
  8. Rachel Garfield, Robin Rudowitz, and Anthony Damico, January 15, 2018, . “Understanding the Intersection of Medicaid and Work,” https://www.kff.org/medicaid/issue-brief/understanding-the-intersection-of-medicaid-and-work/.
  9. Robin Rudowitz, Rachel Garfield, and Elizabeth Hinton, “10 Things to Know about Medicaid: Setting the Facts Straight,” March 6, 2019, http://www.kff.org/medicaid/issue-brief/10-things-to-know-about-medicaid-setting-the-facts-straight/.