Medicaid is a government health insurance program that pays for medical care for people with limited income. It covers everything from doctor visits and hospital stays to mental health treatment, prescription drugs, and long-term nursing home care. Nearly 99 million people were enrolled in Medicaid during fiscal year 2024, making it one of the largest health coverage programs in the country.
What Medicaid actually pays for depends partly on where you live, because each state runs its own version of the program within federal guidelines. Some services are required everywhere. Others are left up to individual states. Here’s how it breaks down.
Services Every State Must Cover
Federal law sets a floor of benefits that all state Medicaid programs are required to provide. These mandatory benefits include inpatient and outpatient hospital services, physician visits, laboratory tests, X-rays, and home health services. If you’re enrolled in Medicaid anywhere in the U.S., you can count on having access to these core medical services at little or no cost to you.
For children and young adults under 21, the coverage goes much further. A federal benefit called Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) requires states to provide comprehensive preventive care for kids on Medicaid. That includes full physical exams, immunizations, developmental screenings, vision and hearing tests, dental care, and lead screening at ages 12 and 24 months. If any screening turns up a problem, the state must cover whatever treatment is needed, even if that service isn’t normally part of the state’s adult Medicaid plan.
Optional Benefits That Most States Offer
Beyond the federal minimum, states can choose to cover a long list of additional services. These optional benefits vary significantly from state to state, which is why two people on Medicaid in different states can have very different coverage.
Common optional benefits include:
- Prescription drugs: Technically optional under federal law, but every single state has chosen to cover outpatient prescriptions. Medicaid spent roughly $29 billion on prescription drugs in a recent fiscal year after manufacturer rebates.
- Dental care for adults: Children get dental coverage through EPSDT, but adult dental is optional. Some states cover comprehensive dental work, others cover only emergencies, and a few offer very limited dental benefits.
- Vision care and eyeglasses
- Physical, occupational, and speech therapy
- Personal care services: Help with daily activities like bathing, dressing, and eating, often provided in the home.
- Hospice care
- Prosthetics and dentures
- Case management services
States can also offer home and community-based services through waivers, which allow people who might otherwise need institutional care to receive support at home instead. These programs often cover things like meal delivery, home modifications, and respite care for family caregivers.
Mental Health and Substance Use Treatment
Medicaid is the single largest payer for mental health services in the United States. It covers psychiatric care, counseling, and increasingly plays a major role in paying for substance use disorder treatment, including services for opioid addiction.
States deliver these behavioral health benefits through several pathways: standard state plan services, managed care organizations, home and community-based waivers, and specialized health home programs for people with chronic conditions. For children, EPSDT requires that any mental health condition identified through screening be treated, giving kids on Medicaid particularly broad access to psychiatric and developmental services.
Pregnancy and Postpartum Coverage
Medicaid pays for roughly 4 in 10 births in the United States. Pregnant women qualify at higher income thresholds than other adults, and coverage includes prenatal visits, labor and delivery, and postpartum care.
Federal law requires states to maintain pregnancy-related Medicaid coverage through 60 days after delivery. However, a provision in the American Rescue Plan Act of 2021 gave states the option to extend that postpartum coverage to a full 12 months. Most states have now adopted this extension, which was designed in part to address racial disparities in maternal health outcomes and prevent gaps in coverage during the critical first year after birth.
Long-Term Care and Nursing Home Coverage
This is one of Medicaid’s most significant roles, and one many people don’t realize until they or a family member needs it. Medicare, the program for people 65 and older, covers very limited nursing home stays. Medicaid, by contrast, is the primary payer for long-term nursing home care in the United States.
For older adults and people with disabilities who need ongoing assistance, Medicaid covers nursing facility care, intermediate care facilities for people with intellectual disabilities, and various home and community-based alternatives. Many families encounter Medicaid for the first time when an aging parent needs nursing home care and has exhausted their personal savings.
Help Paying Medicare Costs
About 12 million Americans qualify for both Medicare and Medicaid, a group known as “dual eligibles.” For these individuals, Medicaid serves as a supplement that fills in Medicare’s gaps. If you qualify for both programs, your state Medicaid program will pay your monthly Medicare Part B premium. Depending on your level of Medicaid eligibility, the state may also cover your Medicare deductibles, copayments, and coinsurance.
Medicaid can also pay for services that Medicare doesn’t cover at all, including long-term nursing home care, personal care services, and certain prescription drugs. This dual coverage is particularly important for low-income seniors and people with disabilities who couldn’t afford Medicare’s out-of-pocket costs on their own.
Who Qualifies for Medicaid
Eligibility is based primarily on income, measured as a percentage of the federal poverty level (FPL). The thresholds vary dramatically by state and by which group you fall into.
In states that expanded Medicaid under the Affordable Care Act, most adults under 65 qualify if their income is at or below 133% of the federal poverty level. As of 2024, the vast majority of states have adopted this expansion. In non-expansion states like Texas, Mississippi, Kansas, and Wyoming, adults without dependent children generally cannot qualify for Medicaid regardless of how low their income is. Parents in these states face very low income limits: just 12% of the poverty level in Texas, 13% in Alabama, and 19% in Mississippi.
Children, pregnant women, and people with disabilities qualify under separate rules with generally higher income thresholds. Some states are notably more generous across the board. Connecticut covers parents up to 155% of the poverty level, and the District of Columbia extends coverage to adults earning up to 210% of the poverty level.
At its peak during fiscal year 2024, nearly 108 million people were enrolled in Medicaid and the related Children’s Health Insurance Program (CHIP) at some point during the year, representing about 31.7% of the U.S. population.