Medicaid is a publicly funded insurance in the United States that provides medical assistance for individuals and families with low incomes and resources. This entitlement program, known as Title XIX of the Social Security Act, was enacted in 1965. The Medicaid program is a federal and state partnership administered at the state level. The program involves a unique federal/state cost sharing formula, called the Federal Medical Assistance Percentage (FMAP), with the federal government reimbursing states based on per capita incomes. States with higher incomes are reimbursed for a lower percentage of their costs than poorer states. All states receive at least 50 percent reimbursement. The average reimbursement rate is 57 percent, with the maximum rate a state can receive of 82 percent . Medicaid funds provided by the federal government to states is the largest source of federal dollars provided to states .
The program consists of required and optional parts. States that choose to participate in Medicaid (which currently includes all states) must provide the required services to all eligible individuals, but can decide on what optional benefits they will provide. This flexibility results in varied medical coverage from state to state. Some states provide minimal services only for those most needy, while other states provide expanded services and eligibility to larger groups of patients. Groups of individuals covered by Medicaid fall into mandatory and optional population groups described as categorically needy, medically needy, or special groups as discussed below .
While most states expand Medicaid benefits to optional population groups and obtain matching federal funds for this commitment, benefits cannot be extended to everybody. For the most part, adult men and nonpregnant women who do not have children and are not disabled will not qualify for any Medicaid benefits, regardless of their income level.
Within the national guidelines, each state administers its own program, by establishing eligibility standards and determines the type, duration, and scope of services that will be covered. Additionally provider payment rates are set by each state, such that payment for services varies widely by state.
BENEFICIARY POPULATION GROUPS
With the passage of the Affordable Care Act (ACA) in 2010, Medicaid will be expanded so that the minimum eligibility level will be 133 percent of the federal poverty level for most Americans under age 65, including childless adults. This change will remove a number of the current categorical eligibility groups. This change will go into effect on January 1, 2014 .