Medicaid is a government program that provides free or low-cost health coverage to individuals who meet certain eligibility requirements. It is managed by the Centers for Medicare & Medicaid Services (CMS), a federal agency. This means that regardless of where a person lives, their Medicare coverage will be the same. Federal regulations require state Medicaid programs to cover certain “mandatory” services, such as hospital and medical care, laboratory and X-ray services, home health services, and adult nursing facility services. State policies have a major impact on the amount of money the federal government spends on Medicaid.
This is because states are guaranteed federal matching funds to cover the costs of covered services provided to eligible individuals. Additionally, states have broad discretion to decide who is eligible, what services they will cover, and how much they will pay for covered services. Medicaid offers benefits that Medicare does not typically cover, such as nursing home care and personal care services. Although only one-fifth of Medicaid members are older people or people with disabilities, they account for nearly half of Medicaid spending. This is because they need more (and more expensive) health care services.
Medicaid covers more than 60 percent of all nursing home residents and approximately 50 percent of the costs of long-term care services and supports. Approximately three-quarters of all Medicaid spending on services goes to intensive care services, such as hospital care, medical services and prescription drugs; the rest goes to nursing homes and other long-term care services and supports. All states cover prescription drugs, and most cover other common optional benefits, such as dental care, vision services, hearing aids, and personal care services for frail elderly people and people with disabilities.