Of course everyone’s heard of Social Security.  Most all of us have heard of Medicare. But what is Medicaid?  Maybe you have, but even so, do you really know what it is?  Sure, it sounds like Medicare, and yes it was born of the same legislation as Medicare, but it isn’t the exactly same.  As the prefix suggests, it has something to do with Medicine, or Medical, or Med-something.  But what is it exactly? Where did it come from, and what does it do?

Medicare

Before we get into Medicaid itself, let’s take just a moment to go over its older sister, Medicare.  Medicare was born out of the Social Security Act of 1965. Medicare is a sort of single-payer insurance system provided by the US Government.  Medicare provides health insurance for people over 65, the disable, and needy children through SCHIP. Medicare also provides prescription medication.

But Medicare is different from its mother, Social Security, in that beneficiaries do not receive a check but instead receive a service or goods.  As an insurance policy, the Medicare system pays the medical provider directly.  Anyone over 65, disabled, or any financially needy children may qualify for Medicare.  Medicare is a system set up under President Lyndon Johnson to make sure that those Americans who cannot afford health insurance do not go unattended.

So, what is Medicaid?

Established in 1965, under that same Social Security Act of 1965 and was established as a complement to Medicare, mainly in the assistance of under-privileged people.

These programs may serve the same purpose, they are both single-payer insurance systems run by government, but there are some differences.  While Medicare is solely run and funded by the federal government, Medicaid is run more by the states, with financial assistance from the federal government. While the states actually have more of a hand in the day to day operations of Medicaid, they must however adhere to federal guidelines just the same.  There are more than 50 million Americans today who participate in the Medicaid program, or about 1 in 7 people.

What Medicaid Provides

Health insurance for the under-privileged, the disabled, and the elderly, if they qualify.  The program acts like a single-payer system and can be used to cover such things as doctor’s appointments, hospital visits, even prescription medication. With the program you can also access dental services. Everything from checkups to oral surgeries to braces, most all dental procedures are covered to some degree, depending on eligibility. In fact, in some instances, routine visits to the dentists are even required.  There are restrictions however, such as the recipient of such benefits cannot be over the age of 21.

What are the Qualifications?

To qualify you do have to be financially needy.  You must also be a United States Citizen, or qualify as a legally admitted immigrant.  Some requirements include your age, whether you’re disabled, if you’re pregnant, blind, or otherwise in immediate need.

What Medicaid does not Provide

Be advised however that just being impoverished does not necessarily qualify you.  Not all poor people qualify just because they’re poor.  Poverty is only one of the requirements and it alone does not necessarily qualify someone.  

Medicaid and Long-term Care

One thing that Medicare does not cover is long-term care.  The only instances where Medicare will pay for long-term care are when it is deemed medically necessary (there are medical issues involved), or if the Medicare patient has been disabled.  But as a rule, Medicare does not provide what is known as “custodial care,” or everyday care.

Medicaid and is where you go if you need help with your long-term care, retirement home, nursing facility in your old age, and it will pay for your long-term custodial costs, even in-home care, but there are financial stipulations. You must qualify as financially needy.

To qualify as financially in need you will have to apply to your state’s system.  As a general rule, any assets you have totaling over $20,000, whether they be property or any cash assets, anything over $20,000 may disqualify you. If you do qualify, the program can help to pay your in-home or even retirement community costs.

The Drug Rebate Program

The Drug Rebate Program was established back in 1990 as part of the Omnibus Reconciliation Act. This was an amendment to the Social Security Act of 1935 and went into effect on January 1, 1991.

The act requires that drug manufacturers agree to a rebate system with the Department of Health and Human Services.  This allows people who are managed by corporate managed care to also be eligible for prescription discounts under the system. Before the act, only those in states where Medicaid dealt directly with doctors and hospitals were eligible. When the program began back in 1990 there were only 3 million people under the direction of corporate managed care.  Today there are over 21 million.

Medicaid and HIV Care

Medicaid in the past actually provided more funds for HIV patients that any other provider.  It was the largest portion of federal money spent on persons who are diagnosed as HIV-positive.  That was, of course, until the implementation of Medicare Part D.  As soon as Medicare Part D was established, those prescription drug costs switched over to Medicare.  But until Medicare took over, it was Medicaid which took the brunt of the costs when it came to AIDS and HIV treatments.

Medicaid Participation

The States’ participation in the system is actually voluntary.  However, all 50 states do actively participate, and have been ever since 1982.  In many states, it is even sub-contracted out to managed care corporations.  Some states simply believe doing so is more cost-effective.  Other states disagree and instead decide to pay doctors and hospitals directly.

The Cost of Medicaid

Each state runs it own program.  The federal government does assist and there are federal guidelines, but by and large this is a program run by the states.  The states must follow these guidelines in order to get matching funds from the federal government.  So the cost of Medicaid is paid for equally by the states and the federal government.  There are some exceptions.  Some of the poorer states do receive a larger than half share from the federal government.

Funding is becoming more and more a financial issue with the states as the costs get higher.  On average, each state spends around 17% of its total budget on Medicaid.  When you add the federal government’s contribution into the equation, that means over 22% of each state’s budget is spent on average on the program.  That’s big.  No other service takes up that large a percentage.  The total cost for child care is more than $300 billion per year. Medicaid payments currently make up nearly 60 percent of all residents living in nursing homes today.  Medicare also pays for 37 percent of all child births in the United Sates today.