EliciaJ. Herz
Specialist in Health Care Financing
Inexistence for 47 years, Medicaid is a means-tested entitlement program thatfinanced the delivery of primary and acute medical services as well aslong-term care to more than 69 million people in FY2011. The estimatedannual cost to the federal and state governments was roughly $404 billionin FY2010. In comparison, the Medicare program provided health care benefits to nearly48 million seniors and certain persons with disabilities, and cost roughly $523billion in FY2010. Because Medicaid represents a large component offederal mandatory spending, Congress is likely to continue its oversightof Medicaid’s eligibility, benefits, and costs.
Understanding the complex statutory and regulatory rules that govern Medicaidis further complicated by the fact that each state designs and administersits own version of the program under broad federal rules. Statevariability is the rule rather than the exception in terms of eligibilitylevels, covered services, and how those services are reimbursed and delivered.The Patient Protection and Affordable Care Act (ACA; P.L. 111-148, asamended) makes both mandatory and optional changes to Medicaid along someof these dimensions.
This report describes the basic elements of Medicaid, focusing on the federalrules governing who is eligible, what services are covered, how theprogram is financed, and how beneficiaries share in the cost of care, howproviders are paid, and the role of special waivers in expanding eligibility andmodifying benefits. Examples of both mandatory and optional eligibility groupsand benefits as defined in the federal statute are described. Basicprogram statistics are also provided. Finally, selected legislativechanges at the federal level via the ACA, and the Supreme Court decision in NationalFederation of Independent Business v. Sebelius announced on June 28, 2012,that affect Medicaid in significant ways are also described.
Date of Report: August 7, 2012
Number of Pages: 19
Order Number: RL33202
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