By Shalina Chatlani, Stateline.org
Congress Republicans are considering $ 880 billion in Medicaid, the joint program of federal government health care for low -income people.
According to the way states react, a republican proposal that would reduce the federal contribution by 90% to the expanded Medicaid programs of states would end up coverage for 20 million of 72 million people on Medicaid – or would cost $ 626 billion over the next decade to keep them on the lists. More than 5 million people could lose coverage if the federals impose work requirements.
In recent months, this complicated government program has been increasingly under the spotlight, so Stateline has set up a guide explaining what Medicaid is and how it works.
1.Dicadaid is not Medicare.
Medicaid serves people with lower income or who have a handicap. Medicare mainly focuses on the elderly, regardless of their income.
Medicaid and Medicare were created in 1965 under President Lyndon B. Johnson. Medicare is the federal health insurance program for people aged 65 or over, although young people with special circumstances, such as permanent renal failure or ALS, can be eligible earlier.
Medicare is a limited additional insurance program. He does not pay long -term care, most dental care or routine physical exams. About 68.4 million people are registered in Medicare.
Medicaid is a more complete government insurance regime financed jointly by the federal government and the States. Medicaid covers most nursing home care as well as long -term care at home and community. Medicaid people generally do not have copaiaments. Only people and families with income under certain thresholds are eligible for Medicaid. About 72 million people, or a fifth of people living in the United States, receive medication from Medicaid.
2. The eligibility of Medicaid varies from one state to another.
In its original form, Medicaid was generally only available for children and parents or children who are eligible with household income below 100% of the federal poverty line ($ 32,150 for a family of four in 2025). Over the years, the program has been extended to include certain pregnant women, the elderly, the blind and the disabled.
States must follow the major federal directives to receive federal funding. But they have significant flexibility in the way they design and administer their programs, and they have different eligibility rules and offer variable advantages.
In 2010, President Barack Obama signed the affordable care law, also known as Obamacare, which enabled the States to expand their eligibility thresholds to cover adults with income up to 138% of the federal poverty line (around $ 21,000 for a person today), in exchange for greater federal counterpart funds. The Columbia district covers parents and guards who gain up to 221% of the federal poverty line.
Only 10 states (Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin and Wyoming) have chosen not to extend the coverage. In non -expansion states, eligibility for guards and parents vary from 15% of the federal poverty line in Texas 105% in Tennessee. In Alabama, people can only get Medicaid if they gain 18% or below the federal poverty line – $ 4,678 per year for a household of three people.
3. The traditional Medicaid exists alongside a health insurance program for children called chip.
Low -income children have always been eligible for Medicaid. But in 1997, the Congress created Chip or the health insurance program for children. The law has given states the possibility of reducing improved federal counterpart funds to extend the coverage of Medicaid to children in families who earn too much money to qualify for traditional coverage of Medicaid, but which do too little money to offer commercial health care.
Like Medicaid, Chip is jointly funded by the federal government and states, but it is not a law program. Chip is a block subsidy program, which means that states receive a fixed amount of federal money each year and are not obliged to cover all those who meet the conditions of eligibility. States decide, according to general federal directives, how their flea programs will work and what the income limits will be. Some states have chosen to separate their Chip and Medicaid programs, while others have decided to combine them using chip funds to extend the eligibility for Medicaid.
4. Medicaid and Chip are important parties of state budgets.
In 2024, the federal government spent less for Medicaid and Chip than for Medicare, Medicare expenses representing 12%, or 847.5 billion dollars, the budget for federal advantages, and Medicaid and Chip representing 8%, or 584.5 billion dollars.
But at the same time, Medicaid is the largest source of federal funds for states, representing approximately a third of the state budgets, on average, and 57% of all the federal funding that states received last year.
5. Federal funding varies depending on the state.
Before the affordable care law, federal funding for Medicaid to states depended mainly on a formula known as the FMAP, or the federal percentage of medical assistance, which is based on the average personal income of residents. States with lower average income receive more financial aid. For example, the federal government reimburses the Mississippi, which is relatively poor, nearly $ 8 for each $ 10 it spends, at a net cost of $ 2. But New York is only reimbursed $ 5. According to law, the FMAP cannot be less than 50%.
ACA has offered states the possibility of extending eligibility and receiving an even higher federal correspondence rate. In states of expansion, the federal government covers 90% of costs for expansion adults. If the Republicans at the Congress reduce this percentage, states should use their own money to compensate for the lost federal dollars. They may have to reduce Medicaid coverage for certain groups, eliminate optional advantages or reduce providers’ payment rates. Alternatively, they could increase taxes or make reductions of other low -budget items, such as education.
Another possibility is that the states that have adopted the expansion of Medicaid would. Nine states (Arizona, Arkansas, Illinois, Indiana, Montana, New Hampshire, North Caroline, Utah and Virginia) have already in place of “trigger” laws which would automatically cancel the expansion if the federal correspondence rate descends below 90%. Other states are considering similar legislation.
A new KFF analysis, a group of health research policies, revealed that if the Congress reduced federal correspondence for the expansion population to percentages that states obtain for the traditional Medicaid population – 50% for the richest and 77% states for the poorest – it would cost $ 626 billion to all states.
6. Medicaid is the greatest source of health coverage, especially for low -income people.
Medicaid is the largest health payer in the country and is particularly important for people of poverty. Almost a fifth of people living in the United States are covered by Medicaid. But almost half of all adults with income or below the federal poverty line are provided by the program. Medicaid covers 4 in 10 children overall, but it covers 8 out of 10 children under the federal poverty line. Medicaid also offers coverage to people who experience roaming or who leave incarceration.
7. Medicaid covers essential services, such as childbirth.
In exchange for receiving federal funds, states are forced to cover essential health care services, including hospital and ambulatory hospital services, visits to the doctor, laboratory work and home health services, among others. States can decide which optional services, such as prescription drugs and physiotherapy, they want to cover.
Medicaid is an important payer of essential services. For example, the program covers 41% of all deliveries in the United States and covers health services for 40% of all adults aged 19 to 65 with HIV.
8. The majority of Medicaid spending return to people with disabilities and to pay long -term care.
ACA expansion adults – approximately 1 out of 4 – represented 21% of the total of Medicaid expenditure in 2021. Children, who represent approximately 1 out of 3 registered, represented only 14% of expenses.
People who qualify for Medicaid due to a handicap or because they are over 65 represent approximately 1 in 4. But they represented more than half of all Medicaid spending. Indeed, these populations generally experience higher rates of chronic disease and require more complex medical care. The elderly are also more likely to use nursing homes and other long -term care establishments, which can be expensive.
Cups could also mean that the elderly who counts on Medicaid for home care and long -term nursing home services could be considerably affected.
9. Some Medicaid state programs illegally cover people who live in the country.
People who are illegally in the country are not eligible for traditional Medicaid or Chip. But some states have dug exceptions to offer them coverage using state dollars.
In January, 14 states and the Columbia district offer Medicaid coverage to children regardless of their immigration status. And 23 states as well as the Columbia district use a chip to cover pregnant registrants regardless of their immigration status.
In addition, seven states provide Medicaid to certain adults who are here illegally. New York has chosen to cover those who meet income requirements and are over 65 years old, regardless of immigration status and California, coverage, to all adults aged 19 to 65 who are under the income threshold, whatever the immigration status.
10. The majority of the public have favorable views of Medicaid.
According to KFF surveys, two -thirds of the Americans say that someone around received medical coverage from Medicaid at some point in their lives. Half of the public also claims that they or someone in his family were covered by Medicaid.
Generally, around 3 people out of 4 – whatever the political party – say that Medicaid is very important, although the Republicans are less likely than democrats and the self -employed to share this opinion. At the same time, a third or fewer people want to see a decrease in spending on the Medicaid program. In fact, the majority of people living in states that have not expanded Medicaid under ACA want their states to do it.
The journalist at Stateline Shalina Chatlani can be contacted at schatlani@stateline.org.
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