What Is Medicaid? Eligibility, Coverage, and How to Apply

What Is Medicaid?

Medicaid is a public health insurance program jointly funded by the federal government and individual states. Created in 1965 alongside Medicare, Medicaid was designed to provide medical coverage to Americans who could not afford private insurance. Unlike Medicare, which is primarily age-based, Medicaid eligibility is largely determined by income and household size.

Today, Medicaid is the single largest source of health coverage in the United States, serving more than 80 million people. Each state administers its own Medicaid program within federal guidelines, which means eligibility rules, covered services, and application processes can vary significantly from one state to another.

The program covers a broad spectrum of healthcare services — from routine doctor visits and hospital stays to long-term care in nursing facilities. For many low-income families, elderly individuals, and people with disabilities, Medicaid is the foundation of their entire healthcare system.

Who Is Eligible for Medicaid?

Medicaid eligibility is primarily based on income, household size, and categorical requirements. Since the Affordable Care Act (ACA) of 2010, many states have expanded Medicaid to cover most low-income adults under age 65 with incomes up to 138% of the Federal Poverty Level (FPL). However, not all states have expanded, so eligibility rules differ depending on where you live.

Core Eligibility Groups

Children: Most children in families with incomes up to 200% of the FPL qualify, and in many states the threshold is even higher through the Children's Health Insurance Program (CHIP).
Pregnant women: Pregnant individuals typically qualify at higher income thresholds, often up to 185–200% of the FPL, to ensure access to prenatal and delivery care.
Parents and caregivers: Adults caring for dependent children may qualify, although income limits in non-expansion states are often very low.
Elderly adults (65+): Seniors with limited income and assets may qualify for Medicaid to cover services that Medicare does not, particularly long-term care.
People with disabilities: Individuals receiving Supplemental Security Income (SSI) are generally automatically eligible for Medicaid in most states.
Low-income adults (expansion states): Under the ACA Medicaid expansion, adults aged 19–64 with incomes up to 138% of the FPL qualify regardless of other categorical factors.

Federal Poverty Level Income Thresholds (2025 Estimates)

Household Size	100% FPL (Annual)	138% FPL (ACA Expansion Limit)
1 person	~$15,060	~$20,783
2 people	~$20,440	~$28,207
3 people	~$25,820	~$35,632
4 people	~$31,200	~$43,056

These figures are approximate and updated annually. Your state may use different thresholds depending on whether it has adopted Medicaid expansion.

What Does Medicaid Cover?

Federal law requires all state Medicaid programs to cover certain mandatory benefits. States also have the option to cover additional services. Coverage is typically comprehensive for those who qualify.

Mandatory Benefits

Inpatient and outpatient hospital services
Physician services and laboratory tests
X-rays and other imaging
Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) for children under 21
Family planning services and supplies
Federally Qualified Health Center (FQHC) services
Nursing facility services for adults
Home health services
Transportation to medical appointments

Optional Benefits (Varies by State)

Prescription drugs (covered by nearly all states)
Dental and vision care for adults
Physical therapy, occupational therapy, and speech therapy
Mental health and substance use disorder services
Personal care services and home- and community-based waiver services
Hospice care

Long-Term Care Coverage

One of Medicaid's most significant and unique roles is covering long-term care — specifically nursing home care and home- and community-based services. Medicare generally only covers short-term skilled nursing care, leaving Medicaid as the primary payer for extended nursing home stays. This makes Medicaid planning critically important for older adults and their families.

How Medicaid Works with Medicare

Some individuals qualify for both Medicaid and Medicare. These individuals are called dual eligibles or Medicare-Medicaid enrollees. This typically applies to low-income seniors and people with disabilities who are 65 or older or who have received Social Security Disability Insurance (SSDI) for at least 24 months.

Program	Primary Role	Who It Covers
Medicare	Pays first for most services	Adults 65+, disabled individuals after 24-month wait
Medicaid	Pays remaining costs (premiums, copays, deductibles)	Low-income individuals, dual eligibles

For dual eligibles, Medicaid acts as a secondary payer, picking up costs that Medicare leaves behind — including Part B premiums, deductibles, and copayments. Medicaid also covers services Medicare does not, such as long-term nursing home care beyond 100 days.

How to Apply for Medicaid

The application process for Medicaid varies by state, but the following steps provide a general framework for most applicants.

Step 1: Determine Your State's Program

Every state has its own Medicaid program with a unique name (for example, Medi-Cal in California, TennCare in Tennessee, or MassHealth in Massachusetts). Visit your state's Medicaid agency website or healthcare.gov to find your state's program and eligibility rules.

Step 2: Gather Required Documentation

Be prepared to provide documentation of the following:

Proof of identity (driver's license, passport, or birth certificate)
Proof of residency (utility bill, lease agreement)
Social Security number
Proof of income (pay stubs, tax returns, benefit letters)
Proof of citizenship or immigration status
Information about other health insurance you may have

Step 3: Submit Your Application

You can apply for Medicaid through several channels:

Online: Most states allow online applications through their Medicaid portal or through healthcare.gov during open enrollment.
By phone: Call your state Medicaid agency or the federal marketplace at 1-800-318-2596.
In person: Visit your local Department of Social Services, health department, or community health center.
By mail: Download and mail a paper application to your state agency.

Step 4: Await Determination

Most states are required to process Medicaid applications within 45 days (or 90 days for disability-related applications). If approved, coverage may be retroactive to cover medical costs incurred up to 3 months before the application date in some cases.

Step 5: Renew Annually

Medicaid eligibility must be renewed each year. States conduct annual redeterminations, and enrollees may need to confirm that they still meet income and eligibility requirements. During the COVID-19 pandemic, continuous enrollment protections were put in place, but these have since ended, and many states resumed routine redeterminations.

Medicaid Managed Care vs. Fee-for-Service

Many states deliver Medicaid benefits through managed care organizations (MCOs) — private health plans that contract with the state to provide covered services. Under managed care, enrollees typically choose a health plan and a primary care provider within that network. Managed care has become the dominant model in most states.

In states or programs using fee-for-service (FFS), Medicaid pays providers directly for each covered service rendered. Fee-for-service is more common for certain populations, including dual eligibles and individuals using long-term care services.

Common Misconceptions About Medicaid

Myth: Medicaid is only for people who are unemployed.
Fact: Many working adults qualify for Medicaid. Having a job does not automatically disqualify you if your income falls below the eligibility threshold for your household size.

Myth: Medicaid takes your house when you die.
Fact: Medicaid Estate Recovery programs may seek repayment from the estates of deceased enrollees who received certain long-term care services. However, protections exist for surviving spouses, minor children, and individuals with disabilities. Rules vary by state.

Myth: You can only apply during open enrollment.
Fact: Medicaid has no open enrollment period. You can apply and enroll at any time of year if you meet the eligibility requirements.

Key Takeaways

Medicaid is a joint federal-state program providing free or low-cost health coverage to low-income individuals and families.
Eligibility is primarily income-based; the ACA expansion extended coverage to adults earning up to 138% of the FPL in participating states.
Coverage includes hospital care, physician services, prescription drugs, mental health services, and long-term care.
Applications can be submitted online, by phone, in person, or by mail at any time of year.
Dual-eligible individuals receive both Medicare and Medicaid benefits, with Medicaid filling the gaps Medicare leaves.