What is Medicaid? Complete Guide

What is Medicaid?

Medicaid is a health insurance program that helps people with low income pay for medical care. It is run by both the U.S. federal government and state governments working together. This program started in 1965, the same year as Medicare, and has helped millions of Americans get the healthcare they need.

Unlike Medicare, which is mainly for older people, Medicaid helps people of all ages who need financial help. Today, more than 80 million Americans have Medicaid coverage. This makes it one of the biggest health insurance programs in the country.

Many people get confused between Medicare and Medicaid because the names sound similar. But they are very different programs that help different groups of people.

Who Can Get Medicaid?

Medicaid is for people who don’t have much money and need help paying for medical care. Each state has its own rules about who can get Medicaid, but there are some basic groups that can qualify.

Low-Income Adults : If you are an adult between 19 and 64 years old and your income is low enough, you might qualify. In states that expanded Medicaid, adults can qualify if they earn up to 138% of the Federal Poverty Level.

Children : Kids under 19 years old from low-income families can get Medicaid. The income limits for children are usually higher than for adults, so more kids can qualify.

Pregnant Women : If you are pregnant and have low income, you can get Medicaid to cover your pregnancy care and delivery. Some states even cover pregnant women with slightly higher incomes.

Elderly People : People 65 and older with low income can get Medicaid. They might also have Medicare, and both programs can work together.

People with Disabilities : If you have a disability and low income, you can qualify for Medicaid at any age. You don’t have to be 65 or older.

Parents and Caretakers : If you are taking care of children and have low income, you might qualify for Medicaid.

The good news is that you can apply for Medicaid any time of the year. There is no special enrollment period like with some other insurance programs.

How Medicaid Started and Changed Over Time

President Lyndon B. Johnson signed Medicaid into law on July 30, 1965. At first, the program only helped certain groups like children from poor families, pregnant women, elderly people, and people with disabilities.

Over the years, Medicaid has grown a lot. In 2010, the Affordable Care Act (also called Obamacare) made big changes to Medicaid. The law allowed states to expand Medicaid to cover more adults who were not disabled and did not have children.

Today, 40 states and Washington D.C. have expanded Medicaid. This means that millions more adults can now get health insurance through Medicaid. In states that did not expand, it is harder for adults without children or disabilities to qualify.

The program keeps changing to help more people. States continue to add new services and benefits to help their residents stay healthy.

Understanding Income Limits for Medicaid

One of the most confusing parts of Medicaid is understanding if your income is low enough to qualify. Income limits are different in every state and depend on what group you belong to.

Income Limits for Regular Medicaid

For regular Medicaid (sometimes called MAGI Medicaid), your income is compared to something called the Federal Poverty Level or FPL. The FPL changes every year and is different based on how many people are in your household.

In expansion states, adults can qualify if their income is below 138% of the FPL. This is about $20,783 per year for a single person in 2025. For a family of four, the limit is around $42,821 per year.

In non-expansion states, the income limits are usually much lower. Some states only cover parents if they earn less than 40% of the FPL, which is extremely low.

Income Limits for Long-Term Care Medicaid

If you need nursing home care or home care services because you are elderly or disabled, different income rules apply. In most states, the monthly income limit for long-term care Medicaid is $2,982 for a single person in 2026.

This type of Medicaid also looks at your assets (the things you own) to see if you qualify. We will talk more about assets later.

Medicaid Type	Who It’s For	Typical Income Limit 2026
Adult Medicaid (Expansion States)	Adults 19-64	Up to 138% FPL ($20,783/year single)
Adult Medicaid (Non-Expansion)	Parents and caretakers	Varies (often 40-100% FPL)
Children’s Medicaid	Kids under 19	Up to 200-300% FPL (varies by state)
Pregnant Women	Expecting mothers	Up to 200% FPL or higher
Long-Term Care Medicaid	Nursing home or home care	$2,982/month (most states)
Aged, Blind, Disabled	Seniors or disabled adults	Around $1,330/month (varies)

What About Assets for Medicaid?

For regular Medicaid (for adults and children), most states do not count your assets. This means you can have money in the bank or own things and still qualify as long as your income is low enough.

However, for long-term care Medicaid and Medicaid for elderly or disabled people, assets do matter. In most states, you can only have up to $2,000 in countable assets to qualify if you are single.

What Are Countable Assets?

Countable assets are things like:

• Money in checking or savings accounts
• Stocks and bonds
• Extra cars (beyond one)
• Second homes or vacation properties
• Valuable collections

What Assets Don’t Count?

Some things are exempt, which means they don’t count against you:

• Your primary home (the house you live in)
• One car
• Personal belongings and household items
• Small life insurance policies
• Retirement accounts in some cases

If you are married, the rules are different. The spouse who is not applying for Medicaid (called the community spouse) can keep more assets so they don’t become poor.

What Services Does Medicaid Cover?

Medicaid covers a wide range of healthcare services. The federal government requires states to cover certain basic services, and states can choose to cover additional services if they want.

Services All States Must Cover

Every state Medicaid program must cover these services:

Hospital Care : Both inpatient care (when you stay overnight) and outpatient care (when you visit but don’t stay).

Doctor Visits : Regular checkups with your primary care doctor and visits to specialists.

Lab Tests and X-rays : All the tests your doctor orders to diagnose health problems.

Nursing Home Care : Long-term care in nursing facilities for people who need it.

Home Health Services : Nursing care and therapy you receive at home.

Family Planning Services : Birth control and reproductive health services.

Transportation : Rides to medical appointments if you don’t have another way to get there.

Preventive Care for Children : Special services called EPSDT (Early and Periodic Screening, Diagnostic, and Treatment) that make sure kids get all the care they need to grow up healthy.

Services Many States Choose to Cover

Most states also cover these additional services:

• Prescription drugs (all states cover this even though it’s technically optional)
• Physical therapy
• Occupational therapy
• Speech therapy
• Dental care (especially for children)
• Vision care and eyeglasses
• Hearing aids
• Mental health services
• Substance abuse treatment
• Hospice care
• Personal care services

The services you can get depend on your state. Some states are more generous than others with what they cover.

What Medicaid Does Not Cover

While Medicaid covers many services, there are some things it typically does not pay for:

Cosmetic Surgery : Procedures done just to improve appearance are not covered. However, if surgery is needed for medical reasons (like after an accident), it may be covered.

Private Hospital Rooms : Medicaid covers a regular hospital room but not a private room unless it is medically needed.

Services Outside the U.S. : If you travel outside the United States, Medicaid usually will not cover your medical care.

Experimental Treatments : Treatments that are still being tested and are not approved might not be covered.

Non-Medical Services : Things like housecleaning or meal delivery that are not medical care are usually not covered, although some states offer these through special programs.

If you need a service and are not sure if Medicaid covers it, ask your doctor’s office or call your state Medicaid office.

How to Apply for Medicaid

Applying for Medicaid is easier than many people think. You can apply at any time during the year. Here are the different ways to apply:

Apply Online

The fastest way to apply is online. You have two main options:

Healthcare.gov : This is the federal Health Insurance Marketplace website. When you fill out an application here for health insurance, it will tell you if you qualify for Medicaid. If you do, your information gets sent to your state Medicaid office.

Your State Medicaid Website : Every state has its own Medicaid website where you can apply directly. Search for “[Your State Name] Medicaid application” to find it.

Online applications usually get processed faster than paper applications.

Apply by Phone

You can call your state Medicaid office and apply over the phone. A caseworker will ask you questions and fill out the application for you. This is helpful if you don’t have internet access or need help with the forms.

You can also call HealthCare.gov at 1-800-318-2596 to apply.

Apply in Person

You can visit your local Department of Social Services (sometimes called DSS, Department of Health, or Department of Human Services depending on your state). A worker there can help you fill out the application.

This is a good option if you have questions or need someone to explain things to you in person.

Apply by Mail

You can download an application from your state Medicaid website, fill it out, and mail it to your local Medicaid office. This takes the longest time to process, so only use this method if you cannot apply online, by phone, or in person.

Documents You Need to Apply

When you apply for Medicaid, you need to prove certain information about yourself. Having these documents ready will speed up your application:

Proof of Identity : Driver’s license, birth certificate, passport, or state ID card.

Proof of Where You Live : Utility bill, lease or mortgage papers, or a letter from someone you live with.

Social Security Numbers : For everyone in your household.

Income Information : Recent pay stubs, W-2 forms, tax returns, Social Security award letters, unemployment documents, or any other proof of how much money you make.

Citizenship or Immigration Status : Birth certificate, passport, naturalization papers, or immigration documents.

Information About Other Insurance : If you or anyone in your family has other health insurance, bring those insurance cards or policy information.

If you don’t have all these documents, apply anyway. The Medicaid office can help you get the papers you need. Don’t let missing documents stop you from applying.

How Long Does It Take to Get Approved?

After you submit your Medicaid application, the state reviews your information to decide if you qualify. The process usually takes 30 to 45 days for most applications.

If you are applying because of a disability, it might take longer – up to 90 days in some cases. This is because the state needs to review medical records to confirm the disability.

While you wait, the Medicaid office might contact you if they need more information or documents. Make sure the address and phone number on your application are correct so they can reach you.

You will get a letter in the mail telling you if you were approved or denied. If you are approved, the letter will tell you when your coverage starts and what services are covered. You will also get a Medicaid card in the mail.

What If You Are Denied?

If Medicaid denies your application, don’t give up. You have the right to appeal the decision. The denial letter will explain why you were denied and how to file an appeal.

Common reasons for denial include:

• Income too high
• Missing documents
• Not a resident of the state
• Already have other insurance

Sometimes the denial is a mistake or based on incorrect information. Many people win their appeals, especially if they provide additional documents or correct errors in their application.

Understanding Different Types of Medicaid Programs

Medicaid is not just one program. There are different types depending on your situation and what kind of care you need.

MAGI Medicaid

MAGI stands for Modified Adjusted Gross Income. This is the type of Medicaid for most adults, children, and pregnant women. It is based only on your income, not your assets.

MAGI Medicaid uses tax rules to calculate your income. If you file taxes, the calculation is similar to how your taxes are figured. If you don’t file taxes, that’s okay too – you can still apply.

Long-Term Care Medicaid

This type of Medicaid helps pay for nursing home care or home care services for elderly people or people with disabilities who need help with daily activities like bathing, dressing, or eating.

Long-Term Care Medicaid has stricter rules. It looks at both your income and your assets. There are different programs under this category:

Nursing Home Medicaid : Covers all costs of living in a nursing home, including room, meals, and medical care.

Home and Community Based Services (HCBS) Waivers : These programs help people get care at home or in their community instead of in a nursing home. Services can include personal care, meal delivery, home modifications, and more.

Aged, Blind, and Disabled (ABD) Medicaid : Covers healthcare for seniors and people with disabilities. This program offers less extensive home care services than HCBS waivers but still provides medical coverage.

Medically Needy Program (Spend-Down)

Some states have a “medically needy” or “spend-down” program. This helps people whose income is too high for regular Medicaid but who have high medical bills.

Here’s how it works: The state calculates how much your income exceeds the Medicaid limit. You then pay that amount toward your medical bills each month. Once you have spent that much on healthcare, Medicaid starts covering your costs for the rest of the month.

For example, if your income is $500 over the limit and you have $500 in medical bills, you pay those bills yourself. After that, Medicaid covers your other medical expenses for that month.

Medicaid for Special Groups

Medicaid has special programs for certain groups of people:

Children’s Health Insurance Program (CHIP)

CHIP covers children in families that earn too much for regular Medicaid but cannot afford private insurance. CHIP covers all the same services as Medicaid for children, including:

• Doctor visits
• Immunizations

• Hospital care
• Dental care
• Vision care
• Prescriptions

The income limits for CHIP are higher than for Medicaid. In many states, families earning up to 200% or even 300% of the Federal Poverty Level can qualify.

Dual Eligible Programs

Some people qualify for both Medicare and Medicaid at the same time. These people are called “dual eligibles.”

This usually happens when someone is 65 or older (or has a disability) and also has low income. Medicare pays for their healthcare first, and Medicaid helps pay for Medicare premiums, deductibles, and copays. Medicaid also covers services Medicare doesn’t cover, like long-term care.

There are special Medicare Advantage plans called Dual Eligible Special Needs Plans (D-SNP) that coordinate both Medicare and Medicaid benefits in one plan.

Former Foster Youth

Young adults who were in foster care can stay on Medicaid until age 26, even if their income is higher than normal limits. This helps young people transitioning to independent life maintain health coverage.

How Medicaid Works – Managed Care vs Fee-for-Service

Most people on Medicaid get their care through managed care plans, but some states still use fee-for-service. Here’s the difference:

Managed Care

With managed care, you choose (or are assigned to) a Managed Care Organization (MCO). This is a private insurance company that contracts with the state to provide Medicaid benefits.

The MCO gives you a list of doctors, hospitals, and other providers in their network. You choose a primary care doctor from this list who coordinates all your care. If you need to see a specialist, your primary care doctor gives you a referral.

The benefits of managed care:

• One place to call with questions
• Care coordination to help you get the services you need

• Usually no bills to pay
• Some plans offer extra services like fitness programs

Fee-for-Service

With fee-for-service, you can see any doctor or provider who accepts Medicaid. The doctor bills Medicaid directly for each service they provide.

You have more freedom to choose providers, but you don’t have care coordination like you do with managed care.

Not all doctors accept Medicaid, so you need to ask before making an appointment.

Medicaid and Pregnancy

Medicaid is a huge help for pregnant women. In fact, Medicaid pays for about 41% of all births in the United States.

If you are pregnant and have low income, you can get Medicaid to cover:

• Prenatal care visits
• Ultrasounds and tests
• Labor and delivery
• Hospital stay after birth
• Postpartum checkups
• Medications

Many states count the unborn baby as part of your household when determining income limits. This can help you qualify even if your income is slightly higher.

Pregnancy Medicaid typically lasts through your pregnancy and for 60 days after you give birth. Some states have extended this to 12 months after birth to help new mothers stay covered.

Keeping Your Medicaid Coverage

Once you have Medicaid, you need to renew your coverage periodically to keep it. This is called recertification or redetermination.

States usually check your eligibility once a year. You will get a renewal form in the mail asking you to update your information. It is very important to fill this out and send it back on time.

If you don’t return the renewal form, your coverage will end. Many people lose Medicaid simply because they didn’t respond to the renewal notice.

What If Your Situation Changes?

You need to report certain changes to your Medicaid office within 10 days, including:

• Change in income (getting a raise, new job, or losing a job)
• Change in address
• Change in household size (new baby, someone moves in or out)
• Getting other health insurance
• Change in disability status

Some changes might make you lose Medicaid, but others won’t affect your coverage. Always report changes so your coverage stays current.

Comparing Medicaid and Medicare

Many people confuse Medicaid and Medicare because they sound similar. Here are the main differences:

Feature	Medicaid	Medicare
Who Runs It	Federal and state governments together	Federal government only
Who Qualifies	People with low income, any age	People 65+ or with disabilities
Based On	Income and sometimes assets	Age or disability, not income
Cost to You	Free or very low cost	Monthly premiums, deductibles, copays
Long-Term Care	Covers nursing homes and home care	Does not cover long-term care
Dental, Vision, Hearing	Often covered (especially for children)	Usually not covered

The key difference is that Medicare is for older people regardless of income, while Medicaid is for people with low income regardless of age.

You can have both Medicare and Medicaid at the same time if you qualify for both programs.

State Differences in Medicaid

Every state runs its own Medicaid program following federal guidelines. This means Medicaid can look very different depending on where you live.

Income Limits Vary : Some states are very generous with income limits, while others are very strict. In expansion states, more people qualify.

Benefits Vary : All states must cover basic services, but optional services differ widely. Some states have very complete coverage, while others cover only the minimum.

Program Names Vary : Medicaid has different names in some states. For example:

• California calls it Medi-Cal
• Massachusetts calls it MassHealth
• Tennessee calls it TennCare
• Oregon calls it Oregon Health Plan

Application Process Varies : Some states make it easy to apply online, while others require more paperwork and in-person visits.

Always check your specific state’s rules when learning about Medicaid.

Important Medicaid Rules for 2026

Some new rules are taking effect in 2026 that Medicaid recipients should know about:

Work Requirements

Starting by the end of 2026, some states will require certain Medicaid recipients to work, volunteer, or participate in education or training programs for at least 80 hours per month.

This applies to adults ages 19-64 who got Medicaid through their state’s expansion program. Many people are exempt from this requirement, including:

• People over 65
• People with disabilities
• Pregnant women
• Parents of young children
• Full-time students
• People in substance abuse treatment

If these requirements apply to you, you will need to report your activities each month to keep your coverage.

More Frequent Renewals

Some states are increasing how often they check eligibility. Instead of once a year, you might need to renew more frequently.

This means it’s even more important to respond to any letters from your Medicaid office and keep your contact information updated.

What to Do If You Have Medical Bills Before Getting Medicaid

Medicaid can help pay for medical bills from the past in some situations. This is called retroactive coverage.

If you had medical expenses in the three months before you applied for Medicaid and you were eligible during those months, Medicaid might pay those old bills.

This can be a huge help if you got sick or injured before you signed up for Medicaid. Talk to your Medicaid office about retroactive coverage when you apply.

Getting Help with Your Medicaid Application

Applying for Medicaid can feel overwhelming, but you don’t have to do it alone. Free help is available:

State Health Insurance Assistance Programs (SHIP) : Every state has a SHIP that provides free counseling about Medicaid and Medicare.

Healthcare.gov Help : If you apply through Healthcare.gov, you can call 1-800-318-2596 for help in English or 1-855-889-4325 for Spanish.

Local Department of Social Services : Staff at your local DSS office can help you apply in person.

Community Organizations : Many churches, community centers, and nonprofit groups have people trained to help with Medicaid applications.

Don’t be afraid to ask for help. These programs exist to make the process easier for you.

Understanding Medicaid Billing for Providers

Medicaid billing works differently than billing for private insurance. Understanding the basics can help you avoid confusion when you get medical care.

How Providers Get Paid

When you see a doctor or get medical care, the provider bills Medicaid directly. You should not receive a bill for covered services.

The provider submits a claim to your state Medicaid program with codes that describe what services you received. Medicaid reviews the claim and pays the provider an approved amount.

Most Medicaid payments are less than what private insurance pays. This is why some doctors limit how many Medicaid patients they accept or don’t take Medicaid at all.

What You Might Pay

In most cases, you pay nothing for Medicaid-covered services. However, some states charge small copayments for certain things:

• $1-$4 for doctor visits
• $1-$3 for prescriptions
• Small amounts for some other services

Children and pregnant women usually never pay copayments. Emergency services are always free with no copay.

If a state charges copayments, there are limits on the total amount you can be asked to pay based on your income.

When You Might Get a Bill

You should only get a bill in these situations:

• You saw a provider who doesn’t accept Medicaid
• You got a service that Medicaid doesn’t cover
• You didn’t show your Medicaid card at the time of service
• There was a billing error

If you get a bill for a Medicaid-covered service from a Medicaid provider, call the provider’s billing department first. Often it’s a mistake that can be fixed quickly.

If the provider insists you owe money for a covered service, contact your Medicaid office. They can help resolve the issue.

Common Medicaid Billing Mistakes to Watch For

Even though Medicaid billing is supposed to be simple, mistakes happen. Here are errors to watch for:

Billing for Services You Didn’t Receive : Sometimes a claim gets filed for a service that wasn’t provided. Always keep track of your medical visits and what was done.

Wrong Medicaid Number : If the provider uses an old or incorrect Medicaid ID number, the claim might get denied and you might get a bill. Make sure providers have your current Medicaid card information.

Out-of-Network Charges : In managed care plans, going to an out-of-network provider might result in bills. Always check if a provider is in your plan’s network before getting non-emergency care.

Non-Covered Services : If you choose to get a service that Medicaid doesn’t cover, you will have to pay for it yourself. Ask before getting care if you’re not sure it’s covered.

Billing After Medicaid Ended : If your Medicaid coverage ended and you didn’t know it, you might get bills for recent medical care. Check your coverage status regularly.

To protect yourself, always show your Medicaid card when you get care and keep copies of any bills or statements you receive.

Your Rights as a Medicaid Patient

As someone with Medicaid coverage, you have important rights:

Right to Quality Care : You have the right to receive the same quality medical care as people with private insurance. Providers cannot give you lower-quality care just because you have Medicaid.

Right to Choose Providers : In fee-for-service Medicaid, you can see any provider who accepts Medicaid. In managed care, you can choose from providers in your plan’s network.

Right to Emergency Care : You can go to any emergency room if you have a medical emergency, even if the hospital is not in your network. Medicaid will cover emergency services.

Right to Appeal : If Medicaid denies coverage for a service or denies your application, you have the right to appeal and ask for a fair hearing.

Right to Privacy : Your medical information must be kept private. Medicaid providers must follow HIPAA privacy rules.

Right to Interpreter Services : If you don’t speak English well, you have the right to an interpreter at no cost when you get medical care or apply for Medicaid.

If you feel your rights have been violated, contact your state Medicaid office to file a complaint.

Tips for Managing Your Medicaid Coverage

Here are some helpful tips to get the most from your Medicaid coverage:

Keep Your Medicaid Card Safe : Treat your Medicaid card like a credit card. You need it every time you get medical care. If you lose it, contact your Medicaid office right away to get a replacement.

Use Preventive Services : Medicaid covers many preventive services at no cost, like checkups, cancer screenings, and immunizations. Using these services helps catch health problems early.

Build a Relationship with a Primary Care Doctor : Having a regular doctor who knows your health history leads to better care. If you’re in managed care, you’ll need to choose a primary care doctor anyway.

Keep Records : Save all letters from Medicaid, medical bills, appointment records, and renewal notices. This helps if there are any problems later.

Report Changes Promptly : Tell Medicaid about changes in your income, address, or household within 10 days. This prevents coverage gaps.

Ask Questions : If something about your coverage or a bill doesn’t make sense, call and ask. Medicaid offices and provider billing departments can explain things.

Know What’s Covered : Learn what services your state Medicaid program covers so you know what to expect.

Don’t Skip Renewals : Always complete and return renewal paperwork on time. Set a reminder on your phone or calendar for your renewal date.

How Healthcare Providers Can Join Medicaid Network

If you are a healthcare provider and want to treat Medicaid patients, you need to enroll with your state Medicaid program. Unlike Medicare which is run by the federal government, Medicaid enrollment happens at the state level. This means you must apply separately in each state where you want to see Medicaid patients.

The enrollment process is different in every state, but most states now use online systems to make it easier. You will need to go to your state Medicaid agency website and create an account in their provider enrollment portal. Some states use their own systems, while others use a system called MEDS (Medicaid Enrollment Data System). You will need your National Provider Identifier (NPI) number to apply. If you don’t have an NPI, you must get one first from the NPPES website before you can enroll in Medicaid.

During the application, you will provide information about your medical credentials, licenses, education, work history, and tax identification number. You also need to show proof that you are qualified to practice in that state. The state will do a background check to make sure you have not had problems with fraud, abuse, or patient safety issues. They will also verify your license is current and in good standing.

The enrollment process usually takes 60 to 90 days, but it can take longer in some states. Some states require you to attend an orientation or training session before they approve you. Once approved, you will receive a Medicaid provider number for that state. This is the number you use when billing Medicaid for services.

After enrollment, you need to understand how Medicaid pays providers. Medicaid payment rates are set by each state and are generally lower than Medicare and much lower than private insurance rates. Many providers find Medicaid pays 50% to 70% of what private insurance pays for the same service. This is why some doctors and clinics limit how many Medicaid patients they accept or choose not to participate in Medicaid at all.

If you join a Medicaid managed care network, you will contract with the managed care organizations (MCOs) that operate in your state. These are private insurance companies that manage Medicaid benefits. You might need to sign separate contracts with each MCO to be in their network. The MCOs set their own payment rates and have their own rules for billing and authorization.

Being a Medicaid provider means you agree to follow state and federal regulations about billing, documentation, and patient care. You must keep detailed records, use correct diagnosis and procedure codes, and submit clean claims. States audit Medicaid providers regularly and can recover payments if they find errors or improper billing. Following the rules carefully protects you from audits and penalties.

Many providers choose to accept Medicaid because it helps them serve their community, especially vulnerable populations like children, pregnant women, and people with disabilities. While the payment rates are lower, Medicaid patients need quality healthcare just like everyone else. For some providers, especially those in community health centers or rural areas, Medicaid patients make up a significant part of their practice.