How Medicaid Works

Medicaid is funded jointly by the federal government and each state. The federal government sets minimum standards and provides matching funds — typically covering 50–77% of program costs depending on the state's per-capita income. States administer their own programs and can expand coverage beyond the federal minimums.

This means Medicaid looks different in every state. The name of the program, the services covered, the income limits, and the application process all vary. Some states call their program by a different name (like Medi-Cal in California or TennCare in Tennessee), but they are all part of the same federal-state Medicaid system.

What Medicaid Covers

Federal law requires all state Medicaid programs to cover a core set of services. States may also offer optional services beyond these minimums.

• Doctor visits and outpatient care
• Hospital care (inpatient and outpatient)
• Emergency services
• Prescription drugs
• Lab tests and X-rays
• Preventive care and screenings
• Mental health and substance use treatment
• Long-term care — nursing home and home-based care
• Dental and vision (varies by state)

Who Qualifies for Medicaid?

Medicaid eligibility is based primarily on income, though other factors like age, disability status, pregnancy, and family composition also matter. The Affordable Care Act expanded Medicaid eligibility in most states to cover adults with incomes up to 138% of the federal poverty level (about $20,000/year for an individual in 2026).

Some groups — like seniors needing long-term care, people with disabilities, and children — may qualify under different rules with different income thresholds.

Medicaid vs. Medicare

Medicaid and Medicare are often confused, but they are separate programs. Medicare is a federal health insurance program primarily for people 65 and older (and some younger people with disabilities), regardless of income. Medicaid is an income-based program for people of all ages.

Some people qualify for both programs — called "dual eligibles" — and receive benefits from both Medicare and Medicaid.

How to Apply

You can apply for Medicaid through your state's Medicaid agency, through healthcare.gov, or through your local Department of Social Services. Many states allow online, phone, mail, and in-person applications. There is no open enrollment period — you can apply at any time, and coverage can be retroactive in some cases.