What is Medicaid?

Medicaid is often described simply as the government’s health insurance program for people who are poor. However, expansions of Medicaid over the past four decades have made it a program that serves a broad range of people who wouldn’t otherwise be able to get insurance because of disabilities, income or health status. Currently, more than 74 million people receive coverage through Medicaid. This is more than the 58 million seniors and disabled people covered by Medicare.

The history of Medicaid

Both the Medicaid and Medicare programs were established in 1965 as part of the Social Security Act. At the time, Medicare’s primary purpose was to provide hospital care and home health coverage for seniors aged 65 and older. Medicaid, on the other hand, was established to provide health-care coverage for low-income children and their caregivers who received cash assistance (often called welfare) from the government.

In 1988, Congress expanded Medicaid to include coverage for pregnant women and infants whose income was below the federal poverty line. Then, in the early 1990s, women and children under age six with incomes up to 133 percent of the poverty line became eligible for Medicaid. Today, according to a report from the Kaiser Family Foundation, about half of all births in the United States are covered by Medicaid.

In 1990, coverage was phased in for low-income children ages 6–18 regardless of whether the family was enrolled in welfare. Prescription drug coverage was also provided to Medicaid enrollees for the first time. In the late 1990s, Medicaid was made available for some additional groups of disabled adults.

This year, debates in Washington about potential changes to the Affordable Care Act (also known as Obamacare) have centered on cuts and changes to Medicaid. Under the ACA, Medicaid expansion has increased enrollment in the program by more than 11 million people. Of the nonelderly, nondisabled adults who are currently covered by Medicaid, nearly 8 out of 10 are in working families, according to the Kaiser Family Foundation. The majority of these people are self-employed, and many others work in jobs that don’t offer substantial health-care coverage.

Medicaid is funded through a partnership between the federal government and the states. States must spend their own money in order to be able to claim federal matching payments. However, states have considerable discretion about how to design their programs. This means that eligibility for Medicaid varies widely from state to state.

After the passage of the Affordable Care Act, 32 states chose to expand access to Medicaid while 19 did not. In states that didn’t expand Medicaid, coverage for able-bodied adults under the program is limited. The median income for those enrolled in the program in these states is 44 percent of the poverty line, leaving only $8,700 to meet basic needs for a family of three. In nearly all of these states, nondisabled adults without children aren’t eligible for coverage.

Nursing homes and Medicaid

About six out of every ten people who live in nursing homes are covered by Medicaid, and Medicaid dollars pay for half of all spending in the long-term care sector. While coverage for longterm care under Medicare is limited and private insurance programs generally don’t pay for long-term care, Medicaid provides many seniors with the ability to get nursing home care.

Alice Jacobs, age 90, is one such person. Even though Jacobs once owned a factory, her savings were drained by the years she spent in an assisted living center. She turned to Medicaid to cover her care at Dogwood Village, a county-owned nursing home in Virginia. “You think you’ve got enough money to last all your life,” Jacobs said, “and here I am.”

Many of Jacobs’ fellow residents at Dogwood Village also lived a middle-class life before the costs of aging drained their savings. “People are simply outliving their relatives and resources, and fortunately, Medicaid has been there,” explains Mark Parkinson, president of the American Health Care Association, which represents nursing homes.

Some health-care policy experts believe nursing home care is a likely target for future cuts to the Medicaid program. Only six percent of Medicaid recipients use long-term care benefits, but the high cost of nursing home care means that 42 percent of all Medicaid dollars are spent there.

Edwin Park, vice president of the Center on Budget and Policy Priorities, believes that in future budget debates, cutting reimbursement rates for nursing homes and tightening eligibility for who can receive the benefits are likely proposals. This would mean that only the most disabled senior citizens would be eligible to use Medicaid’s long-term care benefits. 

Mental health care and Medicaid

At the age of 24, Ornella Mouketou of Washington, D.C., found herself unemployed and severely depressed. Mouketou says that a year ago, “I was just walking around endlessly. I was walking around parks, and I was just crying all the time. It was like an empty black hole.”

She ended up spending several days in a hospital psychiatric ward where she was assigned a case manager from the McClendon Center, a mental health agency. The caseworker followed up with her at home and, a year later, is still in touch with her. Mouketou attends weekly therapy sessions and is on a mood stabilizer, all covered through her Medicaid plan. Mouketou qualifies for Medicaid because Washington, DC, expanded its program under the Affordable Care Act.

Mouketou now works at a CVS pharmacy, and she’s studying to become a pharmacy technician. “I love my job,” she says. “It’s crazy, and it’s fun.”

Linda Rosenberg, president of the National Council for Behavioral Health, says Medicaid’s expansion under the ACA has helped many people with mental health problems return to work. “People of all economic roots have mental illness,” Rosebenberg says. But for people who are poor and don’t receive treatment, it’s especially difficult. Untreated mental health problems can keep them from being able to obtain a job, keep that employment or get promoted.

A pastor and parent’s perspective on Medicaid

The Reverend James Brigman doesn’t consider himself an activist. He sees himself as a rural pastor and a father. Those two roles prompted him to set out on foot for a 375-mile journey from North Carolina to Washington, D.C., in July to speak on behalf of children who receive care through Medicaid. His nine-year-old daughter, Lauren Faith, is considered medically fragile and will likely need continual medical care for her whole life.

When Brigman learned that the Medicaid funded programs Lauren Faith relies on were being targeted for cuts, he felt a responsibility to act. One Sunday, he was preaching about God’s command for Abraham to sacrifice his son Isaac. “I got to the part where God said to cut his own wood for the altar and I explained that it was our actions that God wanted,” Brigman said. “When I said it, I knew God wanted me to speak for all these children and their families who face serious trouble if Medicaid is cut.”

Brigman encourages others to put their faith into action as well. “If it’s important to you,” he said, “don’t wait for someone else to speak for you. You can live by faith, but you’ll need to cut your own wood.”

As people of faith, we’re called to remind our elected officials and our communities of the real people behind the budget debates and statistics surrounding Medicaid. We must ask questions about whose care we value and what risks are being taken if particular cuts are made. We can remind our nation that a system in which some receive care, but other vulnerable people don’t, is a broken system.

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