Understanding Medicaid.

• Author: Waugh, Lisa
• Position: STATESTATS

Medicaid, the nation's public health insurance for low-income Americans, has undergone many changes in its 50-year history, and as discussions on health reform continue, it's sure to see more.

State lawmakers are charged with making the decisions on how to improve this state-federal program, whether to expand it, how to contain costs and more. For new lawmakers unfamiliar with health policy, learning the basics is the first step toward making informed decisions about this complex program. Here are some of the basics.

Even though state Medicaid programs receive almost half of all federal funding given to states, the program still consumes a large share of state budgets. In 2016, Medicaid accounted for an average of 16.8 percent of all state general fund expenditures, and 29 percent when counting federal funds.

One reason costs are high is that Medicaid covers people with complex health-care needs, such as several chronic conditions or serious disabilities, and it pays for high-cost services, such as long-term care. Even though people with disabilities and the elderly comprise just 24 percent of the Medicaid population, they account for 63 percent of all Medicaid costs.

Medicaid is an entitlement program because certain groups, often called the "categorically eligible," automatically qualify for Medicaid services, as long as they are U.S. citizens and legal residents of the state. These groups include low-income infants, children, pregnant women and people with disabilities. States also must cover low-income seniors, some of whom are "dual eligibles" because they also qualify for...