Medicaid is the nation's major public financing program for providing health and long-term care coverage to millions of low-income Americans. It is a federal/state, cooperatively-funded, and state-operated program offering health benefits to eligible low-income individuals, as established under Title XIX of the Social Security Act. States determine program benefits, eligibility requirements, rates of payments for service providers, and administration methods.
To be eligible for federal funds, states are required to provide Medicaid coverage for most individuals who receive federally-assisted income maintenance payments, as well as for related groups not receiving cash payments. Some of the mandatory Medicaid eligibility groups are low-income families with children, supplemental security income (SSI) recipients, infants born to Medicaid-eligible pregnant women, children under the age of six, and pregnant women whose family income is at or below 133 percent of the federal poverty level.
Medicaid is divided into two different parts, mandatory services and optional services. Mandatory services account for 2/3 of the people served by Medicaid, and 1/3 of the spending. States are requited to cover all mandatory populations when they choose to accept federal funding for Medicaid. Optional populations are not required to be covered, although all states cover some optional populations. Examples of the optional groups that states may cover as categorically needy (and for which they will receive federal matching funds) under the Medicaid program are infants up to age one and pregnant women not covered under the mandatory rules whose family income is below 185 percent of the federal poverty level (the percentage to be set by each state), low-income children above the 133 percent poverty level, and certain aged, blind, or disabled adults who have incomes above those requiring mandatory coverage, but below the Federal poverty level. Once a state decides to cover some optional population or service, the state is required to provide that service to every person who is eligible. In other words, optional beneficiaries are also entitled to their coverage, once the state decides to provide it.
State Children's Health Insurance Program (S-CHIP)
An estimated 11 million young families are forced to spend more than 10 percent of their annual income on inadequate medical care. This dreadful statistic helped spark new legislation to help alleviate medical costs for less financially fortunate families. The State Children's Health Insurance Program (S-CHIP) is a source of funding for state initiatives to provide health insurance for uninsured children whose families' income disqualifies them from Medicaid, but is insufficient to provide for private insurance. S-CHIP state grants are flexible in creating programs to target families in need: some expand Medicaid coverage, while others create separate programs. No two states' programs are alike. Block grant funds are available to states on a matching basis and are determined by a formula based largely on the individual state's number of uninsured children whose family income is below 200 percent of the federal poverty line.
Children began receiving insurance through S-CHIP in 1997, and the program was reauthorized in February 2009 when President Obama signed the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) into law. This law finances CHIP through FY 2013, preserving coverage for more than 7 million children who rely on CHIP today and providing the resources for states to cover an additional 4 million uninsured children.