Health Insurance

How Does Medicaid Work

Medicaid is a federal and state government program that works to offer medical or healthcare benefits to individuals and their families that have a low income and possess few assets. Besides them, other people who qualify for the program include pregnant women, dependent children, and seniors, or individuals with disabilities, having no or low source of income, or no health insurance.

Services Provided Under Medicaid

Often, medicaid is mistaken for medicare, which provides services for people beyond 65 years of age and those who have long-term disability, irrespective of their income and assets. Medicaid offers services to those people who fall in the low-income bracket. However, if you are eligible for both, then medicaid has an advantage of paying costs and services that medicare does not cover. The program provides premiums, deductibles, co-payments for services including prenatal care, midwife services, vaccines for children, physician visits, hospital stays, diagnostic testing, and long-term nursing home care to people who are eligible and enrolled. Some programs also cover services such as physical therapy and rehabilitation, prescription drugs, medical appointments, and even transportation.

The Functioning of the Medicaid Program in a Nutshell

In each US state, the medicaid program is powered by funds raised and contributed by the state and federal government. However, to receive matching funds, each state’s system has to fulfill the requirements or rules set by the federal government. The program differs from state to state. A state that has more percentage of families with low income, receives more funds, than states having less percentage of such families. Likewise, the program may also differ with respect to services offered, funds allocated, as well as the time duration up to which a receiver is eligible.

Moreover, in many states, medicaid is also provided to people who have income above the state’s eligibility level, but have regular medical expenses that are not paid by other programs or health insurance. Hence, considering the required medical cost, each state can determine the amount to spend and the duration up to which the services should be offered.

Healthcare providers or doctors who accept this program are paid according to the payment rates which are pre-decided for corresponding medical services. Each state is responsible for deciding the payment rates which should be sufficient enough to include a reasonable number of healthcare providers in the program. Hence, reimbursement rates for physicians and healthcare providers are decided as per a methodology, that assigns a relative amount to the service provided. Hospital and nursing home rates are also decided by a special rate-setting committee.

To apply for medicaid, one has to fill up an application form online. The form can also be collected from the state office dedicated to the program. The person is expected to fill in necessary information in the form, which would be required to decide whether the person qualifies for medicaid benefits or not. The entire procedure of verification may take a month or so, and once the person satisfies the eligibility criteria, he/she can receive the medical services offered by the program.

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