How Is Medicaid Paid For?
Medicaid is an important safety net for many low-income and other vulnerable Americans. The federal government sets up program standards and helps supply funding. The rest of the responsibility is delegated to the states, which may also apply additional eligibility requirements and funding as long as they are in compliance with federal guidelines. Eligibility for Medicaid is typically based on federal poverty guidelines or might be based on disability status. Other populations might also be covered as each Medicaid program differs among states.
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History
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Medicaid was created as part of the Social Security Amendments of 1965, which also created the Medicare program. Prior to this legislation, the provision of health-care services for the impoverished was the responsibility of programs at the state and local government levels. Community hospitals and charities were also relied upon to provide these services.
Medicaid Overview
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Today, Medicaid is the third-largest supplier of health-care insurance in the United States. According to the U.S. Department of Health and Human Services, 12 percent of the U.S. population in 1998 was covered by Medicaid.
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Funding
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The Medicaid program is funded by the federal government and the states. Some states provide additional funding to this program while others fund only what is required by federal law. Each state establishes payment rates and program administration under the federal government's guiding principles. There are Medicaid programs in each state, territory and the District of Columbia.
Eligibility
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The federal government requires that states provide Medicaid health insurance. This program is means tested and based on federal poverty guidelines. Typically, the program covers people with disabilities, pregnant women and families with children. States can extend eligibility to other low-income people.
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References
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