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Health & Medicine

What is Medicaid and How Does It Work?

— August 6, 2020

At present, Medicaid is basically an entitlement program that guarantees benefits for those who are qualified

Covering millions of Americans, Medicaid is the biggest health insurance provider in the US. The program is available to low-income people in all states of America, US territories, and the District of Columbia. It’s a collaboration between the state and the federal governments to provide basic health care coverage.

Every state operates its Medicaid program within the federal guidelines. Since such guidelines are broad, states are flexible in administering and designing their programs. For this reason, Medicaid benefits and eligibility may often vary widely from one state to another. This is the reason why you need to look for an attorney who specializes in Medicaid to fully understand it if you have some concerns.

Medicaid – How It Works

Once you’re qualified for Medicaid, you’ll get a medical card as well as the benefits that you may use in the same way as your other health insurance coverage from your chosen insurance company.

People who are qualified to enjoy the benefits of Medicaid coverage may have this as their health coverage or in conjunction with other insurance plans, like Medicare. The law requires that Medicaid should be considered as the people’s last resort.

It doesn’t mean, however, that you cannot rely on the benefits of Medicaid if you have them. It just means that Medicaid will pay after any payers have paid their share of the provided services. For instance, if you have other kinds of private health care coverage or Medicare, Medicaid will be your secondary payer. The primary payer will be billed first by the health care providers and Medicaid will consider the claim and can pay any balance that’s due after the primary payer was paid.

Oftentimes, Medicaid recipients don’t need to pay a monthly premium for the benefits. However, there are several exceptions. In particular cases, if somebody is getting benefits from Social Security, the nominal deduction can be made from such benefits, depending on the total income and resources to supplement the overall Medicaid coverage cost.

Medicaid also offers full coverage for the majority of medical expenses and doesn’t require payment of deductibles and premiums. Moreover, health care providers who get Medicaid can’t bill the patient for any extra charges once Medicaid adjudicates the claim, like the way Medicare allows them. However, in other cases, the exception is state Medicaid plans covering some optional medical services that aren’t covered under Medicare.

Services That Medicaid Covers

The rules of the federal government require the state Medicaid programs to cover particular mandatory services, including X-ray services, laboratory, physician and hospital care, nursing facility services, and home health services for adults. Also, states are required to give a more complete set of services, which are called EPSDT (Early and Periodic Screening, Diagnostic, and Treatment). Such services are for people who are under age 21.

States may cover particular services. For one, every state covers prescription drugs and covers some common optional benefits, such as hearing aids, vision services, personal care services, and dental care. Such services are optional since states aren’t required to offer them.

Basically, Medicaid doesn’t provide direct health care. Most of the Medicaid beneficiaries are covered using private managed care plans. For some, Medicaid programs pay doctors, hospitals, nursing homes, and some health care facilities for the covered services.

Medicaid – Who is Eligible?

One of the Medicaid basic facts concerning eligibility is that it depends on where you reside. In other states, you may qualify based on the status, family size, income, disability, and some factors that may differ by state.

Elderly Man Sitting in a Nursing Home
Elderly Man Sitting in a Nursing Home; image courtesy of Thomas Bjørkan via Wikimedia Commons,

However, because of the existence of the Affordable Care Act, states had the chance to expand the eligibility of Medicaid based only on income with the use of MAGI (Modified Adjusted Gross Income). Through this system, the income standard in every state is set as a percentage of the federal poverty level. Some requirements may include immigration status, residency, and citizenship.

Some people who get Medicaid through using another program may also qualify under the old set guidelines. Resource or asset tests are still needed when applying for long-term senior care. Limitations on assets may be based on whether the person is married or single. Meeting such limitations is the hardest criterion when applying for Medicaid to cover senior care for long-term.

Unmarried and single seniors who want to get Medicaid coverage for long-term care can’t have countable assets, which may exceed a particular amount. In addition to that, such individuals can’t have an income that exceeds a certain amount every month. Moreover, married people with a spouse at home can’t have combined assets that exceed a specific amount monthly. But, the applicant can keep a specified income each month.


At present, Medicaid is basically an entitlement program that guarantees benefits for those who are qualified. Moreover, it’s effective in supporting financial stability and improving access to care among families who have low-income. But, since it varies from one state to another, it’s best to know the benefits and services it covers in your state to determine if it’s suited for your needs.

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