**By Renuka Rayasam and Sam Whitehead**
In January, during a congressional hearing on his way to becoming secretary of the Department of Health and Human Services, Robert F. Kennedy Jr. got basic details wrong about Medicaid—a program he now oversees. He claimed that Medicaid is fully funded by the federal government (it’s not) and that many enrollees are unsatisfied with high out-of-pocket costs (enrollees generally pay limited, if any, out-of-pocket costs). Medicaid is complex. The $880 billion-a-year state-federal program provides health coverage to millions of disabled and low-income Americans. It covers different services for different people in different parts of the country—and enrollees may interact with private insurance companies without “Medicaid” in their names, leaving some unaware that they are on the program at all.
Although President Donald Trump promised to “love and cherish” Medicaid, Republicans in Congress last week announced federal budget proposals that could dramatically curtail the program. As that debate begins, here is what you need to know about Medicaid.
### What is Medicaid, and how is it different from Medicare?
Medicaid and Medicare were created by the same legislation—an addition to the Social Security Act—that was signed into law by President Lyndon B. Johnson in 1965. Medicaid is a government health insurance program for people with low incomes and adults and children with disabilities. Medicare, by contrast, generally covers those 65 or older. For older Americans with low incomes, Medicaid covers out-of-pocket costs for Medicare. Such individuals are commonly called “dual eligibles” because they qualify for both programs.
### Who is on Medicaid?
More than 79 million people receive services from Medicaid or the closely related Children’s Health Insurance Program. This represents about 20% of the total population of the United States. Most enrollees qualify due to low incomes. About 40% of all children in the country are covered by Medicaid or CHIP, which was created in 1997. Both programs cover services such as routine checkups, vaccinations, and hospital stays. Medicaid also covers pregnant individuals before and after childbirth, accounting for over 40% of all births. Additionally, Medicaid supports people with disabilities or complex medical needs, helping them afford services that allow them to live independently in community settings, outside of institutions like nursing homes and state-run hospitals. The program serves a diverse cross-section of the country: about 40% of those under 65 who use Medicaid are white, 30% are Hispanic, 19% are Black, and 1% are Indigenous. Federal Medicaid dollars cannot be used to cover immigrants who are in the U.S. without legal permission; however, some states, including Washington, D.C., have used their own funds to extend Medicaid coverage to such individuals, with California being the first to do so.
### What are the income qualifications?
Eligibility generally depends on whether a person has a low income, and states have different ways of defining that. For a household of four without dependent children, the current national median coverage level is $44,367. The Affordable Care Act, often referred to as Obamacare, which was enacted in 2010, allowed more people to qualify for Medicaid based on income—this is known as “Medicaid expansion.” The law offered states a significant incentive to add more people to their programs: the federal government would provide more money per enrollee to help cover them. The intention behind this expansion was to close gaps in health insurance programs for millions of Americans who do not receive coverage through an employer. Medicaid would cover individuals with extremely low incomes while allowing those whose incomes rose to transition to subsidized health plans sold through the ACA’s exchanges. In 2012, the U.S. Supreme Court ruled that the decision to expand the program would be left to individual states. Today, 40 states and the District of Columbia—led by both Democrats and Republicans—have opted in. In the 10 states that haven’t expanded Medicaid for low-income adults, the median earnings qualification level is $5,947 a year for a single-person household in 2025. Those earning more than this are not eligible. Adults in these states who earn too much for Medicaid may also earn too little to qualify for assistance in purchasing plans on the ACA exchanges, resulting in a coverage gap affecting an estimated 1.5 million individuals.
### Where does the funding come from?
The federal government pays for most of Medicaid by matching a portion of what states spend. Currently, the federal match is at least 50% of state spending, with more financial assistance available for certain services and enrollees, such as children and pregnant women. Less wealthy states—determined by residents’ per capita incomes—receive a higher match, meaning a greater percentage of federal dollars. For instance, in Mississippi, the federal government covers 77% of the cost of Medicaid. States also benefit from a 90% federal match for enrollees eligible for Medicaid under the ACA’s expansion. There is no spending limit imposed on states for Medicaid, leading to hundreds of billions of federal dollars flowing into states each year. In 2023, states allocated about 15% of their budgets to Medicaid.
### What does the funding pay for?
Federal law mandates that all state Medicaid programs must cover certain services, including emergency medical transportation, X-rays, lab work, family planning, and medication-assisted treatment for opioid use disorder. The program also finances various nursing and home health services, although federal law permits benefits to be recouped after an enrollee’s death. Beyond the federally mandated services, individual states have the flexibility to determine the specific services their Medicaid programs will cover. All states cover prescription drugs, with most covering eyeglasses, some dental care, and physical therapy. Medicaid provides a broader range of mental health and long-term care services than any other type of insurance, whether public or private.
### What is Medicaid called in my state?
Medicaid programs often have different names, even within the same state, because most states utilize private insurance companies to administer them. This can be confusing for consumers who may not realize they are enrolled in Medicaid. In New York, for instance, Medicaid plans are offered by major companies such as Anthem Blue Cross Blue Shield and UnitedHealthcare, as well as lesser-known entities like Amida Care and MetroPlusHealth. In Wisconsin, enrollees may participate in BadgerCare Plus; in Connecticut, it’s referred to as Husky Health; in Texas, it is known as STAR; and in California, it’s called Medi-Cal.
### How does Medicaid affect hospitals and doctors in my state?
Medicaid generally reimburses healthcare providers, including doctors and hospitals, less than Medicare or private insurance. However, it can provide more financial support than caring for individuals who are uninsured. Without Medicaid, many more Americans would find themselves without coverage. Providers and hospitals have come to rely on this funding, and alterations, even if phased in, would require significant adjustments.
### What is the future of Medicaid?
Uncertainty surrounds the future of Medicaid. Republicans in Washington are pushing for significant changes, which may include cuts to federal funding. Such cuts could result in reduced eligibility, fewer available services, or both. This echoes a similar effort to repeal and replace Obamacare in 2017 during Trump’s initial term, which ultimately failed. One major hurdle to any changes is Medicaid’s popularity; 77% of Americans, including majorities of Democrats, independents, and Republicans, view the program favorably. Central to the discussion are key questions regarding the government’s role in American health care: How extensive should the U.S. medical insurance safety net be? Who deserves government assistance? And how will enrollees, states, providers, and the healthcare system adapt to any major changes to Medicaid, especially if implemented gradually?
This article was produced by KFF Health News, a national newsroom that focuses on health issues and is part of KFF—an independent source for health policy research, polling, and journalism. Learn more about KFF.
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