What Is the Medicaid Program?

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Medicaid is a governmental program that provides medical and health-related services for specific groups of people in the United States who meet certain criteria. Many times this care is provided at no cost to individuals and families, serving U.S. citizens with low incomes and few resources.

Children, pregnant women, the elderly, disabled individuals and eligible immigrants are populations who frequently qualify for Medicaid coverage. Covered benefits for eligible children include preventative care, immunizations, physician visits, hospitalizations, health screenings, vision and dental care.

The Medicaid program is managed by the Centers for Medicare and Medicaid Services, a division of the U.S. Department of Health and Human Services. The program was created by President Lyndon B. Johnson when he signed amendments to the Social Security Act in 1965.

The Medicaid program is overseen by the federal government, but each state establishes its own eligibility standards. Each state formulates its own determinations of type, amount, duration and spectrum of services to be covered. Individual states also set their rates of payment for services. There are mandatory federal coverage requirements that must be met by individual states in order to receive federal matching monies.

The Medicaid program sends payments directly to health care providers. States make payments based on a fee-for-service agreement or through HMOs. Individual states are then reimbursed for a portion of their Medicaid costs from the federal government.