What You Need To Know About Medicaid

Insurance is expensive, and most people don’t have the means to cover the exorbitant cost. Several government programs can help provide financial relief for those in need, consider this your starting point: Medicaid.

What is Medicaid
A program funded by both state and federal governments, Medicaid provides medical coverage for low-income individuals and families. Administered at the federal level by the Centers for Medicare and Medicaid Services (CMS), it functions as a critical safety net for millions of households. Because costs are shared between Washington and the states, plan costs run far lower than what most people would pay through an employer or on the open market.

At its core, the program is built on risk-sharing: if the patient cannot pay back the costs, the state picks up the tab. According to the Center on Budget and Policy Priorities (CBPP), the federal government’s share of Medicaid costs, called the Federal Medical Assistance Percentage, or FMAP, never falls below 50%, meaning states always have a funding partner. If you qualify for Medicaid, you are likely eligible for other assistance programs as well.

One limitation worth knowing upfront: Medicaid is not a single national program. Each state runs its own version under federal guidelines set by CMS, which means benefits, provider networks, and eligibility rules vary significantly from one state to the next. Someone who qualifies in a state that adopted the ACA expansion may not qualify at all in a non-expansion state. Provider participation is also uneven; not every doctor or hospital accepts Medicaid, and in some rural areas, finding an in-network provider can be genuinely difficult.

Who is Eligible for Medicaid
To qualify, you generally need a low income, U.S. citizenship or lawful permanent resident status, and limited assets, which often means you have few other health insurance options. Under the Affordable Care Act (ACA) Medicaid expansion, most states have extended eligibility to non-elderly adults with incomes up to 138% of the federal poverty level. Certain categories also require you to be over 65., Medicaid was required to pay for the full cost of long-term care treatment, but most states declined that regulation in exchange for federal funds.

A pregnant woman can qualify for Medicaid once her doctor determines she is eligible. Many states have now adopted extended postpartum coverage lasting 12 months after birth, a change authorized by the American Rescue Plan Act and tracked by KFF’s postpartum coverage extension tracker. Under older rules, a mother would have had to wait until after her six-week postpartum checkup to establish eligibility, but the 12-month extension now applies broadly in participating states.

How to Apply for Medicaid
If you believe you are eligible, apply and see what happens. You can apply through your state’s Health and Family Services Department, directly through HealthCare.gov, or in person at a local Medicaid office. If you have already applied and are unsure of your current status, contact your state’s Health and Family Services Department. There may be forms you need to complete before your application is considered.

You’ll need to prove both your income and your savings. Your assets matter, too. Most long-term care programs cap countable assets at $2,000, though the figure varies by state. According to KFF, asset limits for long-term services and supports are enforced strictly, and anything over the threshold could be subject to estate recovery by the state. If you do have assets, they will most likely become the property of your state government if they are needed to help cover medical costs.

Gather your documents before you apply: Social Security card, proof of income, citizenship status, and similar records. The Social Security Administration (SSA) coordinates closely with Medicaid for Supplemental Security Income (SSI) recipients, and in many states, SSI eligibility automatically confers Medicaid eligibility. If you are married, you will also need to provide your spouse’s income and asset information.

You may need to go through reviews where you will be asked about your medical history and any current or past conditions requiring coverage. The decision is based on eligibility criteria, not on what you deserve or can pay. Your application will be screened, then reviewed.

If Medicaid is approved, you will pay a premium each year, and the state will make up the difference where your income falls short of what’s expected. If you don’t have enough saved to cover the full cost of care, a shortfall is possible.

Leaving the program requires making sure you have no unpaid bills. This may not be a good option if you are carrying significant debt or are a credit risk. The state will contact you if your payments are late or missing.

After your application is processed, there is usually a waiting period before coverage begins, typically a few weeks, though backlogs can stretch that timeline. Under federal rules enforced by CMS, most states must process applications within 45 days (or 90 days for disability-based applications). The state will notify you in writing if your application is denied.

What is Not Covered By Medicaid
Different states have different rules, but cosmetic procedures are universally excluded. Being able to work full-time or part-time, or receiving unemployment benefits, or having a family member able to support you financially, can also affect eligibility.

If you have long-term care insurance and plan to use those benefits, that will disqualify you from certain Medicaid programs. Medicaid does not provide prescription drug coverage for most beneficiaries; that is handled separately through the Medicare Part D program, which you must apply for independently. Individuals who qualify for both Medicare and Medicaid, known as “dual eligibles”, may have their Part D premiums covered by Medicaid, according to the Medicaid.gov eligibility guidelines.

Even with Medicaid coverage, copays may apply to certain services. Providers who accept Medicaid will likely discount their rates, but out-of-pocket expenses are still possible. Federal rules generally cap Medicaid copays at $4 per service for most beneficiaries, as detailed by the Center on Budget and Policy Priorities.

Some Medicaid programs allow adult children to be covered under their parents’ health insurance plan, particularly under the ACA expansion. States with “orphan” plans may also allow adult children to be covered under specific circumstances.

Is Medicaid Right for Me?
If you have no other health insurance options and your income falls within the eligible range, Medicaid is likely your best available coverage. The program provides access to doctor visits, hospital care, and emergency services at far lower cost than private insurance. Costs remain: premiums, potential copays, and the asset recovery rules for long-term care are real financial considerations. Contact your state’s Department of Health and Family Services to understand exactly how your state’s program works. You can also use the eligibility screening tool on Benefits.gov to get a preliminary sense of whether you qualify before starting the formal application process.

Emergency Care
Your Medicaid card gives you access to urgent or emergency care. Depending on your state and the specific program, a doctor outside your network may still be able to provide care. Inpatient hospitalization works differently across programs: some pay for a portion of the stay, while others may allow you to stay at a state-funded facility. You may owe some costs, but your stay can generally be covered in these situations. For individuals who do not qualify for full Medicaid, Emergency Medicaid may still cover treatment for emergency medical conditions, including labor and delivery, as noted by CMS.

If you need medical care or coverage, act as quickly as possible and get familiar with the process. This article covers the basics, but your specific situation may involve factors not addressed here.

Frequently Asked Questions

What is Medicaid and how does it work?

Medicaid is a joint federal and state government program that provides free or low-cost health coverage to eligible low-income individuals, families, pregnant women, seniors, and people with disabilities. The federal government, through CMS, sets baseline requirements, while each state administers its own program, meaning benefits and eligibility rules differ by location. The federal share of funding ranges from 50% to 83% depending on the state’s per capita income.

Who qualifies for Medicaid?

Eligibility depends on income, household size, state of residence, and coverage category. In the more than 40 states that adopted the ACA Medicaid expansion, most adults with incomes up to 138% of the federal poverty level qualify. Other qualifying groups include children, pregnant women, seniors over 65, and people with qualifying disabilities. Non-expansion states have much narrower eligibility criteria for adults.

How do I apply for Medicaid?

You can apply through your state Medicaid agency, through HealthCare.gov, or in person at a local social services office. You will need proof of income, residency, citizenship or immigration status, and Social Security information. Most states must process your application within 45 days, or 90 days if the application involves a disability determination under rules enforced by CMS.

What documents do I need to apply for Medicaid?

You will typically need your Social Security card, proof of income (such as pay stubs or tax returns), proof of citizenship or immigration status, a government-issued photo ID, and documentation of any assets you own. If you are married, your spouse’s income and asset information will also be required. Having these documents ready before you apply can meaningfully speed up the process.

What does Medicaid cover?

Medicaid covers a broad range of services including doctor visits, hospital stays, emergency care, lab tests, X-rays, and nursing home care. Optional benefits that many states include are prescription drugs, dental care, vision care, and home health services. The exact benefits depend on your state’s Medicaid plan and the eligibility category under which you qualify.

What is not covered by Medicaid?

Medicaid does not cover cosmetic procedures. Prescription drug coverage for most beneficiaries is handled separately through Medicare Part D rather than Medicaid directly. Long-term care insurance benefits may disqualify you from certain Medicaid programs. Copays may apply to some services, though federal rules generally cap them at $4 per service under guidelines set by the Center on Budget and Policy Priorities.

What is the Medicaid asset limit?

For long-term care Medicaid programs, most states set the asset limit at $2,000 for an individual and $3,000 for a couple, though some states use different figures. Certain assets are typically exempt, including your primary home (up to a certain equity value), one vehicle, and personal belongings. These limits do not apply to standard Medicaid for low-income adults under the ACA expansion, which generally has no asset test.

How is Medicaid different from Medicare?

Medicare is a federal health insurance program primarily for people aged 65 and older, as well as younger people with certain disabilities, regardless of income. Medicaid is an income-based program for low-income individuals of any age, administered jointly by CMS and the states. Some individuals qualify for both programs simultaneously, they are called “dual eligibles”, and Medicaid may help cover Medicare premiums, deductibles, and out-of-pocket costs for those individuals.

Can I have Medicaid and other insurance at the same time?

Yes. Having both Medicaid and other health coverage simultaneously is allowed. In that case, Medicaid acts as the payer of last resort, meaning it pays after all other insurance has paid its share. Having employer-sponsored insurance does not automatically disqualify you from Medicaid if your income falls within eligible limits, though the rules vary by state.

What happens if my Medicaid application is denied?

If your application is denied, the state must notify you in writing and explain the reason. You have the right to appeal, and most states have a formal hearing process for this purpose. If your income is too high for Medicaid but you still need assistance, you may be eligible for subsidized coverage through your state’s health insurance marketplace under the ACA.

Does Medicaid cover long-term care costs?

Medicaid is actually the largest single payer of long-term care in the United States, covering nursing home stays and home- and community-based services for eligible individuals. The catch is strict: asset limits of $2,000 for an individual apply in most states, and the state may pursue estate recovery after a beneficiary’s death to recoup costs. Anyone considering Medicaid for long-term care planning should review their state’s specific rules carefully, since the financial consequences can affect heirs and surviving spouses.