Medicaid is a joint federal and state health insurance program that covers low-income Americans, including children, pregnant women, older adults, and people with disabilities. It pays for a broad range of medical services, from doctor visits and hospital stays to long-term nursing home care, though the exact benefits vary by state. Over 70% of Medicaid beneficiaries receive their care through managed care plans, which work similarly to an HMO, while the rest use traditional fee-for-service coverage.
Who Qualifies for Medicaid
Eligibility depends on your income, household size, and which state you live in. States use percentages of the federal poverty level (FPL) to set their income cutoffs. For example, a state might set the limit at 133% or 185% of the poverty level for certain groups. Children and pregnant women generally qualify at higher income levels than other adults.
In the 40 states (plus Washington, D.C.) that expanded Medicaid under the Affordable Care Act, most adults with incomes up to 138% of the federal poverty level qualify regardless of whether they have children. In the remaining states, childless adults often cannot get Medicaid at all, no matter how low their income. Older adults (65 and up) and people with disabilities may qualify through separate pathways, often tied to Supplemental Security Income (SSI) standards. In 42 states and D.C., anyone receiving SSI automatically gets Medicaid.
Services Every State Must Cover
Federal law requires all state Medicaid programs to cover a core set of benefits. These mandatory services include:
- Hospital care: both inpatient stays and outpatient visits
- Doctor and nurse practitioner visits
- Lab work and X-rays
- Nursing facility (nursing home) care
- Home health services
- Family planning services
- Nurse midwife and birth center services
- Medication-assisted treatment for opioid use disorder and other substance use conditions
- Transportation to medical appointments
This baseline means that no matter which state you live in, Medicaid will cover a hospital stay, a visit to your primary care doctor, and lab tests your doctor orders. States can add benefits on top of this list but cannot take any of these away.
Benefits That Vary by State
Beyond the mandatory list, states choose whether to offer additional, optional benefits. The most notable ones are adult dental care, vision care (eyeglasses and eye exams beyond medical conditions), physical therapy, occupational therapy, and prescription eyewear. Some states offer robust adult dental coverage including cleanings and fillings, while others cover only emergency dental extractions or nothing at all.
This is why two people on Medicaid in different states can have very different experiences. If you’re unsure what your state covers, your state Medicaid agency’s website will list the full benefit package, or you can call the number on the back of your Medicaid card.
Prescription Drug Coverage
All 50 states and D.C. cover outpatient prescription drugs through Medicaid. This coverage operates through the Medicaid Drug Rebate Program: drug manufacturers agree to pay rebates back to the government in exchange for having their medications covered by Medicaid. The result is that Medicaid covers most FDA-approved drugs, though states can maintain “preferred drug lists” that steer you toward certain brands or generics first.
Your out-of-pocket cost for prescriptions is minimal. States can charge small copayments, but for people with incomes at or below the poverty level, copays for outpatient services are capped at $4. Overall, your total premiums and cost sharing across all services cannot exceed 5% of your family’s income.
Children Get the Broadest Coverage
Children under 21 on Medicaid receive an especially comprehensive benefit called Early and Periodic Screening, Diagnostic, and Treatment (EPSDT). This goes well beyond what adult Medicaid covers. Every child is entitled to regular checkups that include a full physical exam, developmental screening, immunizations, lab tests (including mandatory lead screening at ages 12 and 24 months), and health education.
EPSDT also guarantees vision screening with eyeglasses if needed, hearing screening with hearing aids if needed, and dental care including cleanings, fillings, and medically necessary orthodontics. The critical feature of EPSDT is that if a screening discovers any health problem, the state must cover whatever treatment is medically necessary to address it, even if that service isn’t normally part of the state’s Medicaid plan for adults. This makes Medicaid for children one of the most comprehensive insurance packages available in the U.S.
Long-Term Care and Nursing Home Coverage
Medicaid is the largest payer of long-term care in the country. It covers nursing home stays and, increasingly, home and community-based services (HCBS) that let people receive care at home or in assisted living rather than in an institution.
Eligibility for long-term care services focuses on two things: finances and functional ability. You need to meet income and asset limits, and you need to demonstrate that you require a certain level of daily assistance, sometimes called “institutional level of care.” States don’t require a specific diagnosis. Instead, they assess whether you can perform basic daily activities like bathing, dressing, and eating independently.
There are several pathways into long-term care coverage. One common route, available in most states, covers people with incomes up to 300% of the SSI benefit rate (roughly 222% of the poverty level) who meet the functional criteria for institutional care. Another pathway, called “medically needy,” allows people with high medical expenses to qualify after spending down their income to a state-set threshold. For children with severe disabilities, the Katie Beckett pathway provides coverage even when family income would normally be too high for Medicaid.
Coverage for People With Both Medicare and Medicaid
Millions of Americans qualify for both Medicare and Medicaid at the same time. These “dual eligible” beneficiaries are typically older adults or people with disabilities who also have low incomes. When you have both programs, Medicare acts as the primary insurer and pays first for doctor visits, hospital stays, and other acute care. Medicaid then fills in the gaps by helping pay Medicare premiums, covering Medicare copays and deductibles, and paying for services Medicare doesn’t cover at all, most notably long-term care.
This combination means dual eligible beneficiaries have some of the lowest out-of-pocket costs in the U.S. health system, with nearly all major medical expenses covered between the two programs.
What You’ll Pay Out of Pocket
Medicaid is designed to keep costs very low for enrollees. Federal rules cap what states can charge. For individuals and families with incomes at or below the poverty level, a single outpatient copay can be no more than $4, and a copay for an inpatient hospital stay can be no more than $75. Across all services combined, your total cost sharing in any given period cannot exceed 5% of your family’s income.
Several groups are completely exempt from any premiums or cost sharing. Children under 18 pay nothing. Native Americans who have received care from an Indian health care provider are exempt from all cost sharing. Pregnant women are also protected from most charges for pregnancy-related services. For the majority of Medicaid enrollees, the practical effect is that most care is free or close to it at the point of service.