Key Takeaways:
Medicaid Covers More Americans Than Any Other Health Insurance Program. Here's Who Qualifies, How It’s Funded, and What's at Stake.
For millions of Americans, Medicaid is the difference between having access to care and going without it. Medicaid is the largest public health insurance program in the United States, yet understanding what Medicaid covers and how eligibility varies across states can be complex.
This guide explains what Medicaid is, who is eligible, how it is funded and administered, and how it supports older adults and vulnerable populations. It also outlines how evolving policy decisions may shape access and affordability going forward.
74M+ enrolled | Covers 41% of U.S. births
Primary payer for long-term care for millions
The content on this page is intended for educational use only and is not intended to be used in place of legal advice. Contact a legal aid organization or enrollment specialist within your community.
What Is Medicaid?
Medicaid is a joint federal and state health insurance program that provides coverage to low-income individuals, including children, pregnant people, older adults, and people with disabilities. It is the largest single source of health coverage in the United States. [1]
Medicaid’s reach extends across the healthcare system and population lifecycle. The program covers 41% of all U.S. births and 5 in 8 nursing home residents, underscoring its central role during the most vulnerable parts of peoples’ lives [1]. During the pandemic, Medicaid and CHIP enrollment rose to a record 94 million people, highlighting its role as a safety net during economic disruption [2].
This guide provides a clear Medicaid program overview, including Medicaid eligibility, Medicaid benefits, and costs. It also examines how coverage gaps and policy changes affect older adults, low-income populations, and communities of color. For more context on how Medicaid intersects with broader healthcare trends, see Mosaic's research on healthcare costs and delivery as well as demographics and population health.
Who Qualifies for Medicaid?
Medicaid eligibility is determined by a combination of federal guidelines and state-specific rules. Factors include household income relative to the federal poverty level (FPL), age, disability status, pregnancy, and whether a state has adopted the Medicaid expansion under the Affordable Care Act.
Eligibility for Medicaid is not uniform across the country. Instead, it reflects a layered system where federal requirements establish a baseline and states define how broadly coverage is extended, making it important to understand both national rules and local variation.
Federal Guidelines for Medicaid Eligibility
Medicaid was created by Title XIX of the Social Security Act, which requires states to cover certain populations as a condition of receiving Medicaid funding. These include children, pregnant individuals, parents and caretaker relatives, older adults, and people with disabilities.
Eligibility is largely based on income relative to the federal poverty level, an annually updated income measure used to determine qualification for Medicaid and other programs. In 2024, 138% of FPL equals approximately $20,783 for a single individual.
The Affordable Care Act expanded Medicaid eligibility in participating states to adults ages 19–64 with incomes up to 138% of FPL [3].
Medicaid Eligibility (Federal Baseline)
Category | General Eligibility Threshold |
Children | Varies by state; typically up to or above 138% FPL |
Pregnant People | Often above 138% FPL (state-specific) |
Older Adults & Disabled | Income + asset limits apply |
Low-Income Adults (Expansion States) | Up to 138% FPL |
These federal standards form the foundation of Medicaid qualifications, but actual eligibility can vary significantly depending on where you live.
State Variations and Medicaid Expansion
Because Medicaid is administered by states, eligibility thresholds, covered benefits, and access to care differ across the country.
After the Supreme Court made Medicaid expansion optional, a patchwork system emerged. In expansion states, low-income adults can qualify based on income alone. In non-expansion states, many adults face limited eligibility options.
The Medicaid coverage gap refers to individuals in non-expansion states whose income is too high to qualify for traditional Medicaid but too low to qualify for Affordable Care Act Marketplace subsidies, leaving them without an affordable coverage option.
As of recent reporting:
Special Medicaid Eligibility Categories: Children, Pregnant People, Older Adults, and People With Disabilities
Medicaid plays a disproportionate role in covering populations with the greatest healthcare needs.
Key population coverage statistics:
Medicaid is also critical for older adults through its role in long-term care and cost-sharing support.
Dual-eligible individuals qualify for both Medicare and Medicaid simultaneously. Medicaid helps cover costs that Medicare does not, such as long-term care, dental services, and premiums and copays, making it essential for nearly 1 in 5 Medicare beneficiaries (about 13 million people) [1].
For more on how Medicaid intersects with aging and healthcare coverage trends, explore Mosaic’s national aging readiness data and coverage insights.
What Does Medicaid Cover?
Medicaid coverage is defined by a combination of federal requirements and state-level decisions. Federal law requires all state Medicaid programs to cover a core set of mandatory benefits, while allowing states to offer additional optional benefits based on population needs and budget priorities. As a result, what Medicaid covers can vary depending on where you live and your eligibility category [1].
Mandatory Benefits Covered by All States
All state Medicaid programs must provide a baseline set of healthcare services. These mandatory benefits form the foundation of Medicaid-covered services nationwide.
Core Medicaid Benefits (Required in All States)
Service Category | What It Includes |
Hospital Services | Inpatient and outpatient hospital care |
Physician Services | Doctor visits and medical treatment |
Laboratory & X-ray | Diagnostic testing and imaging |
Nursing Facility Care | Skilled nursing care for adults age 21+ |
Home Health Services | Limited in-home medical care |
Health Centers & Clinics | Federally qualified health centers (FQHCs) and rural health clinics |
Family Planning | Contraception and related services |
Transportation | Non-emergency medical transportation (NEMT) |
Medicaid covers a wide range of essential services, including hospital care, doctor visits, diagnostic testing, and nursing facility care. It also includes services like transportation to medical appointments and home health support, which are benefits that often extend beyond what many private insurance plans offer.
Two important distinctions:
Optional Benefits States May Provide
In addition to mandatory services, states can choose to offer a wide range of optional Medicaid benefits. Many of the services people commonly associate with Medicaid, such as dental and prescription drug coverage, fall into this category.
While technically optional, most states provide many of these benefits in practice.
Common optional Medicaid benefits include:
All states currently cover prescription drugs, and most offer at least some level of dental, vision, and therapy services [1]. Many states have also expanded coverage for behavioral health and maternal care, including prenatal and postpartum services [4].
However, coverage decisions are shaped by budget constraints. For example, some states have restricted coverage of high-cost medications such as GLP-1 weight-loss drugs due to concerns about long-term affordability [4].
This variation helps explain why Medicaid benefits differ significantly across states, even when serving similar populations.
Coverage for Long-Term Services and Supports
One of Medicaid’s most important (and often overlooked) roles is covering long-term services and supports (LTSS).
LTSS include a range of assistance for people who need help with daily activities due to aging, chronic illness, or disability. LTSS spans nursing home care, home health aides, adult day programs, and community-based services that help people remain in their homes.
Medicaid is the dominant payer for long-term care in the United States and covers 5 in 8 nursing home residents [1][5].
A key distinction:
This creates significant variation in access to aging-in-place services depending on state policy decisions.
For more on how housing, care delivery, and aging intersect, see Mosaic’s work on aging in place and value-based payment Medicaid models for long-term services and supports.
Pediatric Benefits Under EPSDT
Medicaid provides comprehensive coverage for children through the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit.
The Early and Periodic Screening, Diagnostic, and Treatment benefit is a comprehensive Medicaid benefit for children under age 21. It requires states to provide all medically necessary services to identify and treat health conditions, even if those services are not otherwise included in the state’s Medicaid plan.
This makes pediatric Medicaid coverage broader than most private insurance.
EPSDT vs. Typical Private Insurance
Benefit Area | Medicaid (EPSDT) | Typical Private Plan |
Preventive care | Comprehensive and required | Covered but varies |
Dental | Broad coverage required | Often limited |
Vision & hearing | Included | Often limited or separate |
Mental health | Required if medically necessary | May have limits |
Specialty care | Covered if needed | Subject to plan limits |
EPSDT ensures that children enrolled in Medicaid receive early intervention and comprehensive care, helping address health issues before they become more serious and costly over time.
Understanding Medicaid Costs and Spending Trends
Medicaid is funded through a shared partnership between federal and state governments, and how that funding is structured directly affects what services are covered and how easily beneficiaries can access care. As healthcare costs rise, Medicaid spending trends play a critical role in shaping program stability and coverage availability.
How Is Medicaid Funded?
Medicaid operates as a joint federal-state program, with the federal government matching a portion of each state’s spending. This matching rate, known as the Federal Medical Assistance Percentage (FMAP), varies by state and is designed to provide greater support to lower-income states.
The Federal Medical Assistance Percentage is the share of Medicaid costs paid by the federal government for each state. FMAP rates are calculated based on a state’s per capita income relative to the national average, with lower-income states receiving a higher federal match.
States receive an enhanced federal match for populations covered under Medicaid expansion, which has helped broaden eligibility in participating states. However, federal policy changes can significantly affect program funding. The Medicaid provisions in the 2025 federal budget reconciliation law (H.R.1) are estimated to reduce federal Medicaid spending by $911 billion, or 14%, over a decade, potentially shifting greater financial responsibility to states.
Trends in Medicaid Enrollment and Spending
Medicaid enrollment and spending have followed diverging paths in the post-pandemic period, highlighting evolving pressures on the program.
This creates a notable paradox: fewer enrollees, but higher overall spending. The increase in per-enrollee costs is driven by several factors:
Medicaid Enrollment vs. Spending Trends
Fiscal Year | Enrollment Trend | Spending Trend |
FY2023 | Peak enrollment (pandemic era) | Elevated spending |
FY2024 | Early unwinding begins | Continued cost growth |
FY2025 | ↓ 7.6% enrollment | ↑ 8.6% spending |
For more insight into how demographic shifts and aging populations are shaping healthcare spending, see Mosaic’s analysis of America’s aging future and the National Aging Readiness data.
Impact of Rising Healthcare Costs on Medicaid Services
Rising healthcare costs across the system directly affect how Medicaid programs operate at the state level.
Nearly two-thirds of Medicaid directors report at least a 50% likelihood of a budget shortfall in FY2026 [4], reflecting growing fiscal pressure. In response, states may adjust program design to manage costs.
Potential state responses include:
Pharmacy spending, particularly for specialty drugs and treatments like GLP-1 medications, has become a key driver of Medicaid cost growth, influencing decisions about what benefits states can sustain.
More broadly, 2025 has marked a shift toward cost containment and operational efficiency across public and private payers [8].
Understanding these cost drivers is essential to maintaining equitable access. Medicaid plays a critical role in supporting older adults, especially through long-term care and dual-eligibility programs, making it vital that cost pressures do not erode access for those who rely on it most.
For more on how policy changes may affect older adults, see West Health Mosaic’s coverage of federal policy impacts on Medicaid access and how Medicaid cuts could shift costs to seniors.
How to Apply for Medicaid and Maintain Coverage
Applying for Medicaid and keeping coverage requires understanding your state’s rules, submitting the right documentation, and completing periodic renewals. Because eligibility varies by state, following a structured process can help reduce delays and prevent coverage gaps.
Checking Eligibility and State-Specific Rules
Before applying, it’s important to determine whether you meet your state’s Medicaid eligibility requirements.
Step-by-step eligibility check:
1. Identify your state’s expansion status (expansion vs. non-expansion).
2. Review income limits based on your household size and eligibility category.
3. Use online screening tools through HealthCare.gov or your state Medicaid website.
4. Contact local assistance programs if you need help interpreting eligibility rules.
Eligibility depends on factors such as income, age, disability status, pregnancy, and caregiving responsibilities. These rules vary significantly across states [3].
Application Process and Documentation Needed
Once eligibility is confirmed, applicants must provide documentation to complete the Medicaid application.
Required documents typically include:
Applications can usually be submitted:
Many applicants benefit from working with enrollment assistors or community navigators, particularly older adults and individuals with disabilities who may face barriers navigating the system.
Renewals and Avoiding Coverage Gaps
Maintaining Medicaid coverage requires completing periodic eligibility renewals. Since the end of pandemic-era protections, this step has become increasingly important.
Continuous enrollment protections ended in March 2023, and states resumed eligibility redeterminations and disenrollments [2]. Many individuals lost coverage due to procedural issues such as missing paperwork rather than true ineligibility.
To avoid coverage gaps:
If coverage is denied or terminated:
For more on how coverage disruptions affect real people, see West Health Mosaic’s determination of three current negative healthcare trends.
Current Medicaid Policy Challenges and Future Outlook
Medicaid’s future is shaped by a combination of federal policy decisions, state budget pressures, and operational challenges that affect how coverage is delivered. Understanding these dynamics is essential for beneficiaries, caregivers, providers, and policymakers navigating a rapidly evolving Medicaid landscape.
State Budget Pressures and Federal Policy Changes
Federal policy changes are poised to significantly reshape Medicaid funding and coverage in the coming years.
The Congressional Budget Office (CBO) estimates that the Medicaid provisions in the 2025 reconciliation law (H.R.1) will reduce federal Medicaid spending by $911 billion, or 14%, over a decade. CBO also projects that these policy changes will increase the number of uninsured individuals by approximately 7.5 million by 2034.
A major change involves Medicaid work requirements. Beginning in 2027, an estimated 20 million beneficiaries will need to verify at least 80 hours per month of work or qualify for exemptions. These requirements could introduce new administrative hurdles that affect coverage continuity.
Additional policy changes, such as limits on provider taxes and reduced federal matching funds, may compound pressure on state Medicaid programs, forcing difficult decisions about eligibility, benefits, and provider payments.
There are also workforce implications. More than 1 in 4 long-term care workers are immigrants, and Medicaid is the dominant payer for long-term care services [5]. Changes to immigration policy could indirectly affect workforce availability, with downstream impacts on access to Medicaid-funded services for older adults.
Potential Changes in Benefits and Provider Rates
As Medicaid funding pressures increase, states may adjust benefits and provider reimbursement to manage costs.
At the same time, Medicaid policy remains dynamic. Thirty-six states planned to add or enhance benefits in FY2026 [4], reflecting ongoing efforts to expand access in key areas like behavioral health and maternal care.
However, new federal limits, such as capping certain state-directed payments at 100% of Medicare rates in expansion states [6], could affect provider participation. Lower reimbursement levels may lead some providers to limit Medicaid patients, potentially affecting network adequacy and access to care.
This creates a complex landscape where states are simultaneously expanding services in some areas while tightening costs in others.
The Role of Data and Coordination in Addressing Access Barriers
Even when coverage is available, administrative barriers can limit access to care.
Across Medicaid managed care organizations (MCOs), the average prior authorization denial rate is approximately 12.5%, with some plans exceeding 25% denial rates. These barriers can delay or prevent access to necessary services. Data-driven approaches are essential to improving Medicaid access. Identifying coverage gaps, streamlining administrative processes, and coordinating care delivery can help ensure that Medicaid fulfills its role as a safety net, particularly for older adults, low-income populations, and communities of color.
Staying informed is critical. Beneficiaries, providers, and policymakers should regularly consult state Medicaid offices, national data trackers, and trusted research sources to understand how policy changes may affect coverage and access.
For broader context on how Medicaid intersects with aging and equity trends, explore West Health Mosaic’s National Aging Readiness data.
Frequently Asked Questions
How does Medicaid work with other health insurance?
Medicaid can work alongside Medicare for individuals who qualify for both programs, known as dual eligibles. For these nearly 13 million people, Medicaid may cover Medicare premiums, copays, and deductibles while also providing additional services such as long-term care and dental coverage.
What services are typically not covered by Medicaid?
Medicaid covers a broad range of healthcare services, but exclusions may include cosmetic procedures, experimental treatments, and certain elective services. Because benefits vary by state, services like adult dental care, vision care, and some prescription drugs may not be covered in all programs.
Can Medicaid cover long-term care at home?
Yes, Medicaid can cover home- and community-based services (HCBS), which allow individuals to receive long-term care in their homes. However, while nursing home care is mandatory in all states, most home-based services are optional and may vary depending on state policy.
How do income and asset limits affect Medicaid eligibility?
Medicaid eligibility is based on income relative to the federal poverty level, along with factors such as age, disability, and household composition. In expansion states, adults earning up to about 138% of the federal poverty level generally qualify, while non-expansion states may have stricter eligibility limits.
What should I do if my Medicaid coverage is denied or reduced?
If your Medicaid coverage is denied or reduced, you have the right to appeal through your state Medicaid agency or managed care plan. Keep records of all communications, request written explanations for denials, and consider contacting a legal aid organization or enrollment assister for support.[GU4.1]
The content on this page is intended for educational use only and is not intended to be used in place of legal advice. Contact a legal aid organization or enrollment specialist within your community.
Citation
West Health Mosaic. What Is Medicaid? A Guide to Qualifications, What It Covers, & Costs. West Health Mosaic. Published [Month Day, Year]. Accessed [Month Day, Year]. [URL]
Additional Resources
https://westhealthmosaic.com/categories/healthcare-costs-delivery
https://westhealthmosaic.com/data-mosaics/national-aging-readiness
https://westhealthmosaic.com/categories/demographics-population
https://westhealthmosaic.com/categories/aging-in-place
https://westhealthmosaic.com/categories/healthcare-lived-experience
https://westhealthmosaic.com/articles/mapping-america-s-aging-future-what-the-national-aging-readiness-dashboard-reveals
https://westhealthmosaic.com/articles/infographic-health-bills-hard-choices
https://westhealthmosaic.com/articles/infographic-new-federal-rules-on-snap-and-medicaid-put-older-adults-at-risk
https://westhealthmosaic.com/articles/infographic-how-medicaid-cuts-might-shift-costs-to-older-adults
https://westhealthmosaic.com/articles/center-for-health-care-strategies-inc-early-state-efforts-to-advance-value-in-medicaid-managed-long-term-services-and-supports-programs
https://westhealthmosaic.com/articles/older-americans-at-risk-three-troubling-healthcare-trends
https://westhealthmosaic.com/articles/understanding-pathways-to-medicaid-eligibility-among-californias-medicare-beneficiaries
https://westhealthmosaic.com/articles/hci-dc-2018-healthcare-costs-white-paper
Notes
[1] www.kff.org. Health Policy 101: Medicaid. https://www.kff.org/medicaid/health-policy-101-medicaid/
[2] www.kff.org. Medicaid Enrollment and Unwinding Tracker. https://www.kff.org/medicaid/medicaid-enrollment-and-unwinding-tracker/
[3] www.healthcare.gov. Medicaid Expansion and You. https://www.healthcare.gov/medicaid-chip/medicaid-expansion-and-you/
[4] www.healthmanagement.com. State Medicaid Programs Face New Challenges: Findings from the 2025 Medicaid Budget Survey. https://www.healthmanagement.com/blog/state-medicaid-programs-face-new-challenges-findings-from-the-2025-medicaid-budget-survey/
[5] www.kff.org. Medicaid: What to Watch in 2026. https://www.kff.org/medicaid/medicaid-what-to-watch-in-2026/
[6] www.healthsystemtracker.org. Eight Trends Shaping 2026 Healthcare Costs. https://www.healthsystemtracker.org/chart-collection/eight-trends-shaping-2026-healthcare-costs/
[7] www.pew.org. New Federal Medicaid Policies Compound State Budget Pressures. https://www.pew.org/en/research-and-analysis/articles/2026/01/13/new-federal-medicaid-policies-compound-state-budget-pressures
[8] atiadvisory.com. 2025 Industry Trends and What to Watch in 2026. https://atiadvisory.com/resources/2025-industry-trends-and-what-to-watch-in-2026/
[9] www.priorauthtraining.org. Navigating Medicaid Coverage Challenges: Strategies for Market Access and Reimbursement Professionals. https://www.priorauthtraining.org/navigating-medicaid-coverage-challenges-strategies-for-market-access-and-reimbursement-professionals/