Medicaid is health insurance supplied by the government to individuals and families with low incomes and resources. While many see Medicaid as an important and vital component of the United State's social safety net, others see it in need of updates and reform.
History of Medicaid
The same act that created Medicare, the Social Security Act of 1965, also created Medicaid. In 1990, legislation was passed that outlined differences to the way that Medicaid dealt with prescription drug reimbursement, which is a significant part of the program's cost. Later, in 1993, that bill was amended to allow Medicaid to sue the estate of former patients for service costs. Also, if a child that is eligible for Medicaid receives specialized services at school, this legislation allows for the school to claim costs related to those services from the program.
Concept of Medicaid
Medicaid is intended to provide medical care for low-income individuals. It is jointly funded by the federal government and state governments. Participation in Medicaid is not a requirement, although at this time all states participate. Often, states bundle Medicaid in with other health services for low-income families, such as the Children's Health Insurance Program (CHIP). Sometimes, private health agencies administer the Medicaid program while states directly control the program in others. Some states allow the use of Medicaid funds to help pay for employer insurance programs, while others do not.
How is Medicaid funded?
The funding for Medicaid is from a joint venture between the federal and state governments. Funding from the federal portion of Medicaid is determined by the relative wealth of each state. Wealthy states in the United States only receive a 50% fund match from the federal government, while poorer states are entitled to a much larger match. In some cases, even with the federal funds match, Medicaid can take up to 16% or more of a state's general fund.
Beneficiaries and Eligibility
While Medicaid is intended for low-income households, poverty alone is not a complete indicator of eligibility. Each state has developed categories, such as pregnant women, children of low-income families, handicapped seniors, and others to determine who can receive services. Children of Medicaid eligible adults are automatically covered if the family meets the requirements. However, children can be eligible for the program even if their parents are not.
Criticism
While almost everyone sees the need for health care services for low-income households, many people take issue with some of Medicaid's implementation. For example, Medicaid often prompts less than scrupulous doctors to bill additional tests and procedures. This allows them to maintain a revenue stream at the expense of the program. On the reverse side of that argument, some state's implementation of Medicaid only allows for one billable procedure each day. This causes a problem for people who are employed since they must claim multiple release days for their health care needs.
Also, since Medicaid is such a substantial component of a state's total budget, many people do not like the way that eligibility is determined. For many states who offer Medicaid funds for the payment of employer health premiums, critics argue that this cost should be shifted to the employer. However, this could create further barriers to employers who offer health insurance.
