Medicaid is a government health insurance program that covers low-income Americans, including children, pregnant women, elderly adults, and people with disabilities. It currently enrolls about 68 million people, making it the largest source of health coverage in the United States. Unlike Medicare, which is primarily for people 65 and older regardless of income, Medicaid is specifically designed for people who can’t afford private insurance or the costs that come with it.
The program is funded jointly by the federal government and individual states. The federal government pays each state a set percentage of its Medicaid costs, and the state covers the rest. This means Medicaid isn’t one uniform program. Each state runs its own version with different eligibility rules, covered services, and application processes, all within a federal framework.
Who Qualifies for Medicaid
Eligibility depends on your income, household size, and which state you live in. Income limits are tied to the federal poverty level (FPL), which changes each year and varies by family size. For children, every state covers families earning at least 133% of the FPL, and most states set the cutoff even higher. For adults without children, coverage depends heavily on whether your state has expanded Medicaid.
The Affordable Care Act gave states the option to extend Medicaid to all adults earning up to 133% of the FPL. As of late 2023, 40 states plus Washington, D.C., have adopted this expansion. In the remaining states, many low-income adults fall into a “coverage gap” where they earn too much for traditional Medicaid but too little to qualify for subsidized marketplace insurance.
Certain groups qualify through categories beyond just income. Pregnant women, children, people over 65, and individuals with disabilities each have their own eligibility pathways. For older adults or people with disabilities seeking coverage for nursing home care, states also look at assets like savings accounts and property. Spouses of people entering long-term care are allowed to keep a certain amount of assets, with the federal range in 2026 set between $32,532 and $162,660, though exact limits vary by state.
What Medicaid Covers
Every state must cover a core set of services. These mandatory benefits include hospital care (both inpatient and outpatient), doctor visits, lab work and X-rays, home health services, nursing facility care, and comprehensive screening and treatment for children. States also must cover transportation to medical appointments, family planning services, and nurse midwife services.
Beyond the mandatory list, states can choose to offer additional benefits. Prescription drugs, dental care, eyeglasses, physical therapy, occupational therapy, speech therapy, and personal care services are all technically optional. In practice, every state covers prescription drugs, and most cover at least some dental and vision care. But the specifics differ widely. A service that’s fully covered in one state might not exist in another, which is why checking your own state’s Medicaid plan matters.
For children specifically, Medicaid provides something called Early and Periodic Screening, Diagnostic, and Treatment services. This ensures kids receive regular checkups, vision and hearing screenings, dental care, and treatment for any conditions discovered during those screenings. It’s one of the most comprehensive pediatric benefit packages in any insurance program.
How Much You Pay Out of Pocket
Medicaid has some of the lowest cost sharing of any health insurance. States can charge small copayments for most services, but these are capped at nominal amounts. For a doctor visit, the maximum copay for someone at or below the poverty level is $4. Preferred prescription drugs carry the same $4 cap, while non-preferred drugs can cost up to $8.
Several categories of care have no cost sharing at all: emergency services, family planning, pregnancy-related care, and preventive services for children. States can set slightly higher copays for people with incomes above 100% of the FPL, but total out-of-pocket spending for any family is capped at 5% of household income. Compared to private insurance, where a single emergency room visit can generate hundreds or thousands of dollars in cost sharing, Medicaid’s financial protections are substantial.
How Care Is Delivered
Most Medicaid enrollees don’t interact directly with a government agency when they see a doctor. About 83% of beneficiaries are enrolled in managed care plans, which are private health insurance companies that contract with the state to deliver Medicaid benefits. You get an insurance card from the managed care plan, choose from its network of doctors and hospitals, and the plan handles claims and referrals much like employer-sponsored insurance would.
The alternative is fee-for-service, where the state pays doctors and hospitals directly for each visit or procedure. This model gives you more flexibility in choosing providers but is less common now. Some states use a mix of both systems or assign different populations to different delivery models.
Medicaid and Medicare Together
People who qualify for both Medicaid and Medicare, often called “dual eligibles,” get coverage from both programs simultaneously. This primarily includes low-income seniors and younger adults with disabilities. Medicare serves as the primary insurer for hospital stays, doctor visits, and post-acute care. Medicaid then fills the gaps by helping pay Medicare premiums and copays and covering services Medicare doesn’t, most notably long-term care in nursing homes or at home. For someone on a fixed income who needs ongoing support, this dual coverage can mean the difference between affording care and going without.
How to Apply
You can apply for Medicaid through your state’s Medicaid agency, through the federal Health Insurance Marketplace at HealthCare.gov, or in many states through an online portal, by phone, by mail, or in person. The documentation you’ll need is straightforward: a valid Social Security number, proof of residency in your state, and verification of income. Pay stubs, benefit award letters, or copies of checks showing gross income all work as income proof.
You’re responsible for providing documentation to support your application, though for some programs your stated income may be accepted without additional verification unless it conflicts with information the agency already has. Processing times vary by state, but federal rules require states to make eligibility decisions within 45 days for most applicants and 90 days for people applying on the basis of a disability.
If your income or circumstances change after enrollment, you’re expected to report those changes. States also periodically redetermine eligibility, typically once a year, to confirm you still qualify. If you lose Medicaid coverage, you may be eligible for a special enrollment period to purchase marketplace insurance instead.
CHIP: Coverage for Children Above Medicaid Limits
The Children’s Health Insurance Program, or CHIP, works alongside Medicaid to cover children in families that earn too much for Medicaid but can’t afford private insurance. About 7.2 million children are enrolled in CHIP. Like Medicaid, it’s jointly funded by federal and state governments, and benefits typically include doctor visits, immunizations, hospital care, dental and vision care, and lab services. Some states run CHIP as an extension of their Medicaid program, while others operate it as a separate program with its own rules.