Established in 1965 by Title XIX of the Social Security Act (SSA), Medicaid is a jointly funded federal-state entitlement program that provides benefits for medical and health-related services to America’s poorest people. Medicaid covers three main groups of low-income Americans: parents and children, the disabled, and the elderly. In fiscal year (FY) 1998, 41.4 million people were enrolled in the Medicaid program and 40.6 million beneficiaries accessed services, including 18.9 million children (47%), 7.9 million adults (19%), 6.6 million individuals who were blind or disabled (16%), and 3.9 million elderly (10%).1 As such, Medicaid covered more Americans than Medicare or any other health insurer and one fifth of all children in the United States. More recently, Congress created the State Children’s Health Insurance Program (SCHIP) as Title XXI of the SSA in 1997 to provide coverage for children in low- to moderate-income families who do not qualify for Medicaid.

Although roughly half of all Medicaid beneficiaries are children, only 17% of expenditures go for children’s services. The vast majority of all Medicaid spending is associated with services for the elderly (30%) and disabled (42%). Medicaid spending from federal and state sources totaled $161.2 billion in 1997 (compared with $214.6 billion for Medicare, the primary federal health care program for the elderly and disabled). The federal government pays at least 50% of the cost of Medicaid in every state and up to 78% in some states (national average = 57%).2

Although large in scope, Medicaid benefits are subject to specific eligibility regulations set by both state and federal governments. As originally enacted, Medicaid was limited to persons eligible for Aid to Families with Dependent Children (AFDC), now referred to as Temporary Assistance for Needy Families (TANF). Over the last three decades, eligibility rules have been amended and Medicaid coverage has been broadened to include additional populations. As a result, beneficiary regulations have become considerably more complex.

Medicaid rules are further complicated by the fact that states have discretion, within broad national guidelines set by the Centers for Medicare and Medicaid Services (CMS), formerly the Health Care Financing Administration (HCFA). Accordingly, states can establish their own eligibility standards; determine the type, amount, duration, and scope of Medicaid services; set payment rates for services; and administer their individual programs. Given this relative autonomy over key implementation measures, Medicaid programs can vary considerably from state to state.

Considerable attention has been focused on Medicaid dental services in recent years, in part because of greater recognition that individuals covered by Medicaid are disproportionately affected by dental diseases and in part because of widespread concerns about the level of access afforded by Medicaid dental programs. For example, children covered by Medicaid are three to five times as likely to have untreated dental disease than their more affluent counterparts.3 Growing awareness of these issues has led to a series of federal initiatives and prompted several states to implement policies and operational changes aimed at increasing provider participation, access to services, and overall Medicaid program performance.


Three basic groups of low-income people are eligible for Medicaid:

Federally mandated eligibility groups include the following:

Children under age 6 and pregnant women* whose family income is at or below 133% of the federal poverty level*

States have the option to extend Medicaid eligibility to “categorically needy” groups. Examples of the optional groups that states may cover as categorically needy (and for which they will receive federal matching funds) under the Medicaid program include but are not limited to the following:

Many states have elected to provide a “medically needy” category of eligibility that allows persons who have too much income to qualify under the mandatory or optional categorically needy groups to receive Medicaid benefits. This option allows them to buy in to Medicaid by incurring medical or remedial care expenses to offset their excess income, thereby reducing it to a level below the maximum allowed by that state’s Medicaid plan. States may also allow families to establish eligibility as medically needy by paying monthly premiums to the state in an amount equal to the difference between family income and the income eligibility standard.



As noted earlier, Medicaid has grown significantly from its original eligibility relationship to federal cash assistance programs. Recent congressional legislation provides for expanded coverage to a number of low-income pregnant women, poor children, and some Medicare recipients who are not eligible for any cash assistance program. Legislative changes have focused on both increasing access and improving quality of care, and some have lengthened specific benefits beyond the normal run of Medicaid eligibility and placed restrictions on states’ ability to limit specified services.

Since its inception Medicaid has played a prominent role in providing health insurance to low-income children—particularly younger children. Each year more than one third of all births in the United States are covered by Medicaid. In 1998 Medicaid covered 25% of U.S. children under age 3, 22.9% of children between ages 3 and 5, and 15.5% of children between ages 12 and 17.4 Lower percentages of older children with Medicaid coverage reflect higher income-eligibility criteria for older age groups. Overall, one out of five U.S. children were served by Medicaid in FY 1998.

Mandatory eligibility expansions during the late 1980s contributed to growth in the number of children enrolled in Medicaid. Children (including children with disabilities) represented 54% of the 41.4 million individuals enrolled in Medicaid in FY 1998. The next largest group of enrollees was adults age 21 to 64 (nearly 31%); the elderly, age 65 and over, accounted for the smallest group of enrollees by age.4

The proportion of Medicaid beneficiaries with disabilities has increased over time. In 1973 the blind and disabled represented 11% of the total Medicaid population. By 1998 the blind and disabled represented 18% of the total Medicaid population. In contrast, beneficiaries over age 65 decreased from 19% to 11% of the Medicaid population during the past 25 years.5

Jan 5, 2015 | Posted by in General Dentistry | Comments Off on 4: MEDICAID AND THE STATE CHILDREN’S HEALTH INSURANCE PROGRAM
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