RESULTS — The Power to end Poverty


Our health crisis would be even worse if it weren’t for the Medicaid program. Medicaid pays for medical assistance for individuals and families with low incomes and resources and covers 58 million low-income people, including 29.5 million children.  It is administered by the states and funded by both the federal and state governments. Medicaid is larger than any single private health insurer. Medicaid provides long-term care to millions of seniors, critical services that help Americans with disabilities live independently, and is a core part of the successful coverage of America’s children. According to the latest Census Income, Poverty, and Health Insurance Data released September 17, 2013, the number of uninsured dropped from 50 million in 2010 to 48 million in 2012 (15.4 percent of all Americans). The Census attributes this drop to more young adults getting coverage because of the Affordable Care Act and that Medicaid and Medicare enrollment continues to increase. 

Medicaid responds automatically in a weak economy, helping vulnerable Americans weather tough economic times. Additionally, Medicaid spending on hospitals, clinics and other health care providers ripples through local economies, paying the salaries of nurses, doctors, and other vital health care workers, who in turn spend money at local businesses. Census data shows that safety net programs for children work: as private insurance coverage for children dropped by 800,000, Medicaid and the Children's Health Insurance Program (CHIP) covered 700,000 more kids in 2010.

RESULTS champions Medicaid expansion and improvements because it covers millions of low-income people, including children, the disabled, and seniors.  In March 2010, the Patient Protection and Affordable Care Act (ACA) was signed into law. This health reform legislation enacted the largest expansion of Medicaid in decades, extending eligibility to everyone at or below 138 percent of the federal poverty line (FPL).  Unfortunately, the Supreme Court in 2012 ruled that states could not be required to expand Medicaid, so states now have the option to implement Medicaid expansion.  As of May 30, 2014, 27 states (including the District of Columbia) have opted into the Medicaid expansion, 20 have opted out, and 4 have yet to decide. The Congressional Budget Office estimates that as a result of this expansion, 7 million more people will be covered in 2014, 11 million more in 2015, and 12-13 million more each year between 2016 and 2024.  In addition, in 2013 and 2014, the rates at which Medicaid doctors are reimbursed for their services increased to the same level as Medicare. This will encourage more doctors to take Medicaid patients. This rate increase, coupled with the new investments in community health centers contained in the law, will significantly expand access to services for low-income individuals and families.

Medicaid at Risk in Budget Negotiations

Proposals have been made in both the House and the Senate to make deep cuts to Medicaid as a way to reduce the deficit, including turning them into block grants to states and canceling the ACA Medicaid expansion. House Budget Committee Chairman Paul Ryan's budget for FY 2015, passed by the House in a 219-205 vote, would cut Medicaid by 26 percent by 2024. These cuts would result in millions losing access to these vital services and falling deeper into poverty.  Proposed cuts to Medicaid would shift more costs to states, leading to restricted enrollments, eligibility, and benefits during downturnsEconomic activity and job generation will also be harmed; Medicaid dollars spent not only benefit individual families but also spur economic activity.  RESULTS will work vigilantly to oppose any efforts to cut or restructure Medicaid (as well as child nutrition and health programs) in deficit reduction negotiations.  

General Background Information and Resources

Medicaid is a program that pays for medical assistance for individuals and families with low incomes and resources. Medicaid’s funding comes from both the federal and state governments, and is the largest source of funding for medical and health-related services for people with limited income.


To qualify for Medicaid, an individual must meet financial criteria and also be part of a group that is “categorically eligible” for the program, such as low-income children, pregnant women, the elderly, people with disabilities, and parents. The income levels at which these groups qualify vary from state to state and group to group, generally with coverage of children and pregnant women being available at higher income levels, followed by people with disabilities and elderly, then parents of dependent children.  As a result of the Affordable Care Act, states have the option of providing coverage to non-elderly, non-disabled childless adults making up to 138 percent of the federal poverty level ($16,104 for an individual and $27,310 for a family of three in 2014).  A report by the Kaiser Family Foundation shows that prior to 2014, less than half of all states covered parents at or above the federal poverty level (FPL), and only 9 states provided full coverage to childless adults.  For states opting into Medicaid expansion, the median eligibility threshold rose from 106% FPL to 138% FPL for parents and from 0% FPL to 138% FPL for childless adults between 2013 and 2014.  Unfortunately, the eligibility threshold for parents is below the FPL in 20 of the 24 states that have not opted into Medicaid expansion, and the median eligibility level is only 49% FPL in these states.  Additionally, childless adults generally remain ineligible for Medicaid in these states.  Adults with incomes below the federal poverty line but above their state's eligibility threshold will be left without affordable coverage, being ineligible both for Medicaid and for tax credits through the ACA marketplace.

To bring light to the vast array of individuals who benefit from Medicaid, especially families, MomsRising has collected over 500 stories about Medicaid experiences from around the country.


Services covered by Medicaid include physician and hospital visits, well-child care, health screenings, vision care, and dental services and all services that a doctor or other health care professional identifies as “medically necessary.”  The child health component of Medicaid is the Early Periodic Screening, Diagnosis, and Treatment (EPSDT) Program. EPSDT is required in every state. It is intended to fund necessary and appropriate screening and treatment for all eligible children.

Medicaid was designed to address the needs of low-income individuals; therefore, it is the best designed program to cover a growing population in need of public support for their health care needs. Medicaid participants can appeal coverage denials without risk of losing their coverage, unlike many private plans, and Medicaid covers many services not typically covered by private health insurance such as:

Medicaid currently protects low-income individuals against unaffordable out-of-pocket costs. The Federal government limits how much a person on Medicaid can be charged for service, and adults enrolled in private insurance plans pay more than six times as much in out-of-pocket expenses. Medicaid also provides comprehensive coverage, ensuring care without limitation on total cost of long-term care due to serious illness. Those in Medicaid are less likely than those without insurance, and those in private insurance, to lack a usual source of coverage or to have unmet health care needs.

A study by the National Bureau of Economic Research found several additional benefits of Medicaid. The study compared individuals insured with Medicaid to low-income individuals with no health insurance at all. Researchers found that those with Medicaid were 30 percent more likely to be admitted to the hospital, 35 percent more likely to go to a doctor or clinic, and 15 percent more likely to use perscription drugs. Women with Medicaid were more likely than poor uninsured woman to recieve mammograms and have their cholesterol checked. Aside from health benefits, Medicaid also provided financial benefits; those with Medicaid were 40 percent less likely borrow money or fail to pay bills.

Federal Funding of State-Run Medicaid Programs

The need for Medicaid is countercyclical. This means that as the economy worsens and more people lose their jobs and health benefits, many people turn to government safety-net programs such as Medicaid, thus requiring an increase in funding for the program. Unfortunately, because Medicaid is a federal-state partnership and therefore funding for Medicaid is dependant on state budgets, states often cut Medicaid during economic downturns in order to balance their budgets.

During economic downturns, we must make sure that these safety-nets are protected, and expanded, to meet their growing demand. RESULTS supports efforts to strengthen Medicaid by improving the financing structure. Financing should be such that states do not face the prospects of cutting millions off of Medicaid just as the need grows. The best way to do this is to build in automatic increases in the federal share of costs as state revenues fall, as was recommended by the Government Accountability Office in 2011.

The Federal Medical Assistance Percentage (FMAP) is the federal government’s shared fiscal responsibility of each state’s expenditures for Medicaid. This percentage is determined annually and designed so that the federal government pays a larger portion of Medicaid costs in states with lower per capita income relative to the national average. Under law, the FMAP funding cannot be lower than 50 percent or higher than 83 percent. For example, in FY 2008, Mississippi, Arkansas and Louisiana received over 70 percent federal funding while 12 higher per capita states received the minimal 50 percent.

Every 1 percent increase in the unemployment rate is expected to produce an additional 1 million people enrolling in Medicaid and CHIP, even as states revenues are expected to continue to fall at a rate of 3 to 4 percent. The economic recovery package signed into law on February 17, 2009, the American Recovery and Reinvestment Act (ARRA), included an $87 billion temporary increase in FMAP to meet the increased demand for Medicaid.  Temporarily increasing the FMAP is also a proven strategy for stimulating the economy and providing immediate relief to state and local economies. 

Health Care Provider Reimbursement Rates

One of the key challenges in Medicaid is finding doctors to pay Medicaid patients. Medicaid is very much like a single-payer program; doctors treat patients and then are reimbursed for their services by state and federal governments. Unfortunately, the reimbursement rate for doctors who treat Medicaid patients is very low. Medicaid doctors are only paid 66 percent of what Medicare doctors are paid for primary care. As a result, because doctors are not required to take Medicaid patients, many refuse to do so. In 2008 only 40 percent of physicians accepted all of the new Medicaid patients that came through their doors. This means that Medicaid patients have fewer outlets to seek medical care than do Medicare and private insurance patients.

In a 2010 survey, the United States Government Accountability Office (GAO) examined the rates of primary and specialty care physicians enrollment in Medicaid. They found that while about 83 percent of primary care physicians are enrolled as Medicaid providers, only about 71 percent of speciality physicians are. However, both types of physicians still remain more likely to accept privately insured children. About 79 percent of physicians accept all privately insured children, whereas only about 47 percent accept children in Medicaid and CHIP. Aside from low reimbursement rates, physicians treating Medicaid experience other challenges such as difficulty in referring children to the speciality care that they need. For those providers not enrolled in Medicaid, they cite administrative issues, such as reimbursement issues, as barriers to enrolling in the program.

The Center for Budget & Policy Priorities has taken the position that, 'In a reformed system where Medicaid serves as a foundation for universal coverage, it is essential that payment rates be brought up to levels sufficient to encourage more providers to participate in the program." It is the position of the American Academy of Pediatrics that health care reform should recognize that health care providers must receive adequate payment if they are to provide comprehensive quality health services for all children and ensure physician payment is comparable in all commercial and government-subsidized health insurance programs for children.

The Kaiser Family Foundation's State Health Facts site posted a Medicare-to-Medicaid Fee Index that shows that nationwide Medicaid reimbursement rates for primary care are 66 percent of Medicare rates; and a Medicaid Physician Fee Index by State showing the low rates paid by California and New York, two of our most populous states. The Center for Studying Health System Change notes, in findings of a 2008 physician survey, that 28.2 percent of all physicians accept no new Medicaid patients, while only 13.7 percent accept no new Medicare patients.

Additional Resources: