MEDICAID

Medicaid is a large social welfare program operated jointly by the federal and state governments. A 1965 amendment to the Social Security Act of 1935 created the program, which allows low-income individuals access to medical care.

How does it work? The federal government provides money to the states. The states then add funding of their own to this amount and administer medical programs for the poor in compliance with federally established standards.

Before Medicaid developed, health care for the poor was very limited and came from a variety of sources, including hospitals, charities, and state and local governments.

What type of care can a Medicaid patient receive? A Medicaid recipient may obtain treatment from five different categories of care: inpatient hospital services, outpatient hospital services, laboratory and x-ray services, skilled nursing home services, and physician services.

Initially, Medicaid recipients were able to select their own doctors and hospitals, but because of a large increase in medical expenditures, states now direct Medicaid recipients to certain health plans that attempt to control costs and quality of care. As a result, only approved medical care providers, including physicians, nursing homes, and hospitals are entitled to receive Medicaid payments for their services.

In 1995, there were about 30 million Medicaid recipients.