What is Medicaid? (Everything You Need to Know in 2024)
Medicaid is a government-funded program providing essential healthcare coverage to low-income individuals of all ages. Medicaid eligibility is based on income, typically at or below 133% of the federal poverty level, with specific requirements varying by state. Certain disabilities will also qualify you for Medicaid.
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Brad Larson
Licensed Insurance Agent
Brad Larson has been in the insurance industry for over 16 years. He specializes in helping clients navigate the claims process, with a particular emphasis on coverage analysis. He received his bachelor’s degree from the University of Utah in Political Science. He also holds an Associate in Claims (AIC) and Associate in General Insurance (AINS) designations, as well as a Utah Property and Casual...
Licensed Insurance Agent
UPDATED: Jun 25, 2024
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We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes should be easy. This doesn’t influence our content. Our opinions are our own.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.
UPDATED: Jun 25, 2024
It’s all about you. We want to help you make the right legal decisions.
We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes should be easy. This doesn’t influence our content. Our opinions are our own.
On This Page
What is Medicaid? Medicaid programs provide essential healthcare coverage to people who otherwise couldn’t afford it. It’s available to Americans of all ages, and nearly half of all Medicaid beneficiaries are children.
Medicaid pays for doctor’s visits, hospital stays, prescriptions, and vaccines. However, it doesn’t cover everything, and you may still have to figure out how to finance what your health insurance won’t cover.
Your income must be at or below 133% of the federal poverty level (FPL), but each state has different parameters. You may still be eligible where you live, so don’t hesitate to apply.
Keep reading to understand how to qualify for Medicaid coverage. We highlight the differences between Medicaid services and Medicare so you can find affordable health insurance at any age. Compare health insurance plans today with our free tool above.
- Medicaid is a government-funded program that pays for most medical services
- Anyone with low income at or below 133% of the federal poverty level qualifies
- Medicaid income limits vary by state
How Medicaid Works
Medicaid insurance is a government-funded program that makes healthcare more affordable. Who can get Medicaid? Anyone with low income, including children and pregnant women, elderly adults, and people with disabilities.
To qualify for Medicaid, your income must be at or below 133% of the federal poverty level.
You have to prove your income to the Medicaid office when you enroll. Each state defines the income requirements for Medicaid services. For instance, you may qualify at 100% of the FPL.
Include one or more of these documents as proof you meet Medicaid income limits:
- Pay stubs
- Bank or pension statements
- Tax returns
- Social Security benefits letter
You might be able to use a self-declaration of income form or a written statement from an employer if you can’t provide other proof of income.
What Medicaid Covers
Medicaid provides comprehensive health insurance coverage for:
- Doctor’s visits and specialist care
- Prescriptions and vaccinations
- Hospital stays and nursing home care
- Dental and vision care
Medicaid services don’t cover a private room in a hospital unless it’s medically necessary, and plans do limit some prescription drug coverage. Only medications listed on the state-approved formulary are covered, so check with your local Medicaid office to ensure the medicine you need is on the list.
Medicare insurance will also not cover cosmetic or elective surgeries or any medical care provided outside of the U.S.
Read More: The Millennial’s Guide to Health Insurance
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How Much Medicaid Costs
Medicaid covers most healthcare and emergency services. Beneficiaries never pay for emergency medical care, preventative care for children, or family planning services, but state Medicaid can require copayments and coinsurance on other services.
This table breaks down the maximum out-of-pocket cost by income level:
Medicaid Services | 100% FPL | 150% FPL | >150% FPL |
---|---|---|---|
Medical Care | up to $75 | 10% state cost | 20% state cost |
Specialty Care | up to $4 | 10% state cost | 20% state cost |
Non-Emergency ER | up to $8 | up to $8 | 5% state cost |
Prescription Drugs | $4-$8 | $4-$8 | $8 |
The federal government caps how much state Medicaid offices can charge, and out-of-pocket costs depend on income level. In general, if you have any out-of-pocket costs, you can expect your deductible to be $2.65 and any copayment to be $4.
Medicaid income limits will vary by state, so visit Medicaid.gov to check the requirements where you live.
Read More: How much does Medicare cost?
Medicaid vs. Medicare
Medicaid and Medicare serve different groups of people and have different funding sources. For instance, Medicare is fully funded by the federal government, while states are responsible for a portion of their Medicare programs. Learn more in our expert guide to Medicare.
Access to Medicare is exclusively limited to older Americans over 65. Certain diagnoses can qualify younger people for Medicare, but Medicare doesn’t have income limits like Medicaid. However, Medicaid eligibility comes with perks if you’re looking into Medicare Savings Programs. These plans help cover some of Medicare’s deductibles, coinsurance, and copayments, as well as prescription drugs.
If you’re enrolled in Medicaid, you qualify for additional savings:
- Qualified Medicare Beneficiary Plus (QMB+) Program: Covers Medicare Part A and Part B out-of-pocket costs, plus full Medicaid benefits.
- Specified Low-Income Medicare Beneficiary Plus (SLMB+) Program: Covers Medicare Part B premiums and provides full Medicaid benefits.
If you’re over 65, research these savings programs when you sign up for Medicare to lower your healthcare costs.
History of Medicaid
Medicaid was created as a part of the Social Security Amendments in 1965 to provide affordable and uniform medical care to Americans who couldn’t afford commercial healthcare plans from private companies.
#CoverageMatters to over 73M #Medicaid & #CHIP beneficiaries pic.twitter.com/mgOuzfxS2B
— MedicaidGov (@MedicaidGov) November 23, 2016
The Medicaid expansion of 2010 came with the passing of the Affordable Care Act, which lowered the income limits and eligibility requirements. However, states can choose to keep Medicaid income limits at previous levels but won’t receive as much federal funding.
Use our health insurance guide to compare medical plans in your state and see if Medicaid could benefit you.
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What You Need to Know About Medicaid Coverage
What is Medicaid? Medicaid insurance is a state and federally-funded program aimed at providing accessible healthcare to low-income individuals. The important things to know about Medicaid is your income must be at or below 130% FPL to be eligible, and you still might be responsible for some out-of-pocket costs.
Medicaid covers a wide range of medical services, such as doctor’s visits, hospital stays, prescriptions, and vaccinations. Some limitations do apply, such as private hospital rooms and elective surgeries, but dental and vision care is included.
Not to be confused with Medicare, which is a federal program available to those over 65 or with certain disabilities, Medicaid covers eligible citizens of all ages.
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Frequently Asked Questions
What is the difference between Medicare and Medicaid?
Medicare is specifically designed to help seniors over 65 pay for medical costs and hospital and hospice stays. Medicaid is for Americans of any age who need assistance paying for medical care, including doctor and dentist visits.
Who is currently eligible for Medicaid?
Any U.S. citizen or permanent resident can apply for Medicaid if their household income is at or below 130% of the federal poverty level.
What is the lowest income to qualify for Medicaid?
Medicaid income limits vary by state. Generally, if an individual makes less than $1,700/mo (around $2,800/mo for families), they will qualify for Medicaid. If you don’t qualify, learn how to finance what your health insurance won’t cover.
How does Medicaid verify income?
The Medicaid office will check tax returns, bank statements, pay stubs, and Social Security verification letters to confirm your income.
Does Medicaid cover dental?
Yes, Medicaid pays for dental care.
What will Medicaid pay for?
Medicaid covers doctor and dentist visits, specialist care, vision care, prescriptions, vaccinations, and hospital and nursing home stays. Learn more in our health insurance guide.
What age does Medicaid stop?
Children over the age of 18 will have to apply for Medicaid as adults. Some states will not offer Medicaid to able-bodied adults without disabilities, regardless of income, so check your eligibility with the local state Medicaid office.
What qualifies someone to be eligible for Medicare early?
You must be diagnosed with end-stand renal disease or Lou Gehrig’s disease to enroll in Medicare early.
Who is not eligible for Medicare?
Anyone under the age of 65 cannot get Medicare unless they’ve been diagnosed with a qualifying disease or disability. Check your eligibility in our free Medicare guide.
Can you use Medicaid with Medicare?
You can use Medicaid to supplement Medicare, but states have different criteria for eligibility. Enter your ZIP code to see what kind of coverage is available near you.
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Brad Larson
Licensed Insurance Agent
Brad Larson has been in the insurance industry for over 16 years. He specializes in helping clients navigate the claims process, with a particular emphasis on coverage analysis. He received his bachelor’s degree from the University of Utah in Political Science. He also holds an Associate in Claims (AIC) and Associate in General Insurance (AINS) designations, as well as a Utah Property and Casual...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.