Medicaid funding has become a major budgetary issue for many states

Medicaid funding has become a major budgetary issue for many states over the last few years, with states, on average, spending 16.8% of state general funds on the program. If the federal match expenditure is also counted, the program, on average, takes up 22% of each state’s budget.

Some 43 million Americans were enrolled in 2004 (19.7 million of them children) at a total cost of $295 billion. In 2008, Medicaid provided health coverage and services to approximately 49 million low-income children, pregnant women, elderly people, and disabled people.Federal Medicaid outlays were estimated to be $204 billion in 2008.

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Public health benefits

A 2011 paper by the Massachusetts Institute of Technology and the Harvard School of Public Health, “The Oregon Health Insurance Experiment: Evidence from the First Year,” use Oregon’s 2008 decision to hold a randomized lottery for the provision of Medicaid insurance in order to measure the impact of health insurance on an individual’s health and well-being. The study examined the outcomes of the 10,000 lower-income people eligible for Medicare who were chosen by this randomized system, which helped eliminate potential bias in the data produced.

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Medicare is a social insurance program funded at the federal level

Unlike Medicaid, Medicare is a social insurance program funded at the federal level and focuses primarily on the older population. As stated in the CMS website, Medicare is a health insurance program for people age 65 or older, people under age 65 with certain disabilities, and people of all ages with end stage renal disease. The Medicare Program provides a Medicare part A which covers hospital bills, Medicare Part B which covers medical insurance coverage, and Medicare Part D which covers prescription drugs.

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State participation in Medicaid is voluntary

However, all states have participated since 1982 when Arizona formed its Arizona Health Care Cost Containment System (AHCCCS) program. In some states Medicaid is subcontracted to private health insurance companies, while other states pay providers (i.e., doctors, clinics and hospitals) directly. There are many services that can fall under Medicaid and some states support more services than other states.

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Medicaid serves as the nation’s primary source of health insurance coverage for low-income populations

Each state administers its own Medicaid program, establishes their own eligibility standards, determines the scope and types of services they will cover, and sets the rate of payment. Benefits vary from state to state, and because someone qualifies for Medicaid in one state, it does not mean they will qualify in another.[6]

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