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Medicaid was enacted in the same legislation that created the Medicare program, that is, the Social Security Amendments of 1965. Medicaid is the health insurer of last resort for the nation’s most vulnerable populations.

Prior to the passage of this legislation, health care services for the indigent were provided primarily through a patchwork of programs sponsored by State and local government, charities, and community hospitals. In addition, Congress had passed the Social Security Amendments of 1950, which provided federal matching funds for State payments to medical providers on behalf of individuals receiving public assistance payments. In 1960, the Kerr-Mills Act created a new program called Medical Assistance for the Aged. This means-tested grant program provided federal funds to States that chose to cover the medically needy aged, who were defined as elderly individuals with incomes above public assistance guidelines, but still in need of assistance for medical expenses.

In 1965, Congress adopted a combination of approaches to improve access to health care for the elderly. The Social Security Amendments of 1965 created a hospital insurance program to cover nearly all the elderly (Medicare Part A), a voluntary supplemental medical insurance program (Medicare Part B), and at the same time expanded the Kerr-Mills program to cover additional populations, including families with children, the blind and the disabled, which became the Medicaid program.

In 1965, President Johnson signed the Medicaid program into law, along with its companion program, Medicare (which provides health insurance coverage for the elderly and disabled who are entitled to Social Security benefits) as Title 18 of the Social Security Act. The Medicaid program became effective July 1, 1966.

Federal Expansion of Medicaid

On March 23, 2010, in the most significant regulatory overhaul of the country’s health care system since the passage of Medicare and Medicaid, President Obama signed the Patient Protection and Affordable Care Act; on March 30, 2010 he signed the Health Care and Education Reconciliation Act of 2010, collectively referred to as the Affordable Care Act (ACA) of 2010. The ACA attempts to increase the number of people with health insurance by requiring most uninsured to purchase health insurance; by providing insurance affordability products to purchase private health insurance coverage for moderate income consumers who do not qualify for Medicaid; by encouraging employers to offer health insurance through tax credits and penalties; through enhanced federal support for the Children’s Health Insurance Program; and by expanding the Medicaid program, allowing more people at the lowest income levels to qualify for coverage.

While the U.S. Supreme Court in June 2012 upheld all provisions of ACA (including Medicaid expansion) it restricted the federal government’s ability to withhold federal Medicaid funds if a state elected not to implement the expansion. Effectively this ruling gave the states the option to expand Medicaid or not.

To date thirty two states, including NYS, as well as Washington D.C., have expanded their Medicaid program. It is important to note that per the Centers for Medicare & Medicaid Services (CMS) guidance, there is no deadline for states to implement the Medicaid expansion provided through the ACA.

In 2017 there was an attempt by Congress to repeal and replace the ACA, however, to date these attempts failed.


Federal Level

The overall responsibility for the administration of the Medicaid program on the federal level lies with the Centers for Medicare & Medicaid Services (CMS), within the Department of Health and Human Services. CMS has primary responsibility for formulation of policy and guidelines, maintenance and review of utilization records, and general financing of Medicaid.

State Level

Federal rules mandate the overall parameters of the program, including a set of health benefits that must be offered, but Medicaid is a state administered program, and each state sets its own benefits package, provider payment rates, and program administration under broad federal guidelines.

Each state spells out what is available under its Medicaid program in a document called the “state plan.” The state plan describes the groups of individuals who can receive Medicaid services and the services that the state will make available to them. A state can amend its plan to change its program. State plan amendments are subject to federal review and approval. Every state that opts to participate in Medicaid must designate a single state agency to administer or supervise the administration of the state Medicaid plan. In NYS, the single state agency is the State Department of Health (DOH). The DOH serves as the State’s liaison to the federal government on Medicaid issues, works to ensure compliance with federal requirements, implements eligibility and benefits policies, oversees the Medicaid claims system, and establishes rates of payment for certain providers.

Almost every office or division within the DOH handles some aspects of the Medicaid program. For example, the Office of Health Systems Management is responsible for establishing rates of payment for institutional and long-term care providers, the Office of Managed Care is responsible for managed care programs, the Center for Community Health oversees the family planning benefit program, the breast and cervical cancer Medicaid expansion, and the public health aspects of the Medicaid program.

While the DOH is the single state agency with legal responsibility for federal compliance and spending, it controls only a portion of the Medicaid program. Responsibility for special populations, discrete programs, client enrollment and oversight is distributed among a variety of State agencies, as well as local governments. More than a dozen NYS entities, 57 counties and the City of New York, as well as private contractors play a role in the administration of Medicaid.

However, with the implementation of the ACA, client enrollment procedures are gradually being transferred back to state oversight. Certain populations, as of January 1, 2014 will apply for Medicaid through the New York State of Health Insurance Marketplace. These include parents/caretaker relatives with children under age 19, pregnant women, children through age 18, and adults age 19 through 64 who do not have Medicare.

Local Level

In NYC, the Medical Assistance Program (MAP) of the Medicaid Insurance and Community Services Administration, (MICSA) within the Human Resource Administration (HRA) has responsibility for the administration of Medicaid. However, as a result of the ACA, MAP oversees the application and renewal process for the aged, blind with Medicare, disabled with Medicare and for specific Medicaid programs, such as community and institutional long term care services, among others. HRA no longer has jurisdiction over pregnant women, parents/caretaker relatives, children through 18 or adults 19 through 64 without Medicare, unless in need of designated services, such as community-based long term care services (personal care services, skilled nursing care in the home, etc.), waiver services or institutional based Medicaid services.


Medicaid is a joint federal and state program. In addition to the state and federal government, New York’s counties share in the cost of the Medicaid program. Federal law (Title XIX of the Social Security Act) and regulations spell out the requirements that a state must meet in operating its Medicaid program. If a state meets these requirements, the federal government pays a percentage of money, called the Federal Medical Assistance Percentage (FMAP), of the amount of money the state spends for Medicaid eligible individuals. In order to expand Medicaid services, a state must provide more of their own tax dollars to get more money from the federal government.

With the exception of a few program elements that are reimbursed at higher rates, the federal matching rate can range from 50% to 83% of total expenses. This federal matching assistance percentage varies from state to state and year to year because it is based on the relative wealth of each state versus the national average. New York’s overall federal matching rate is 50%. The percentage of the NYS’ share of costs relative to the counties’ share will continue to increase due to the cap on local government contributions that became effective in January 2006.

Funding for the expansion of Medicaid under the ACA will be covered 100% by the federal government through 2016. Beginning in 2017, the federal match will gradually decline until it reaches 90% in 2022 and beyond.

Summary of the Medicaid Program

In general, Medicaid in NYS provides a comprehensive benefit package that covers provider coverage, in-patient and outpatient services, dental care, home health care, prescription drug coverage, long term care, and much more. In 55 of the 62 counties within NYS, recipients are mandated to receive services through a managed care plan. Individuals who meet an exemption or exclusion from managed care will access medical services through fee-for-service, where the recipient must seek services from a provider that accepts Medicaid.

Households must meet certain eligibility criteria to qualify for the Medicaid program, including residency, citizenship/immigration criteria, and financial criteria. Low-income New Yorkers qualify for Medicaid under either the MAGI eligibility group (parents/caretakers with children, pregnant women, children through age 18, and adults 19 through 64 without Medicare) or the non-MAGI eligibility group (aged, blind with Medicare, or disabled with Medicare) or receiving certain Medicaid services, such as community-based long term care services (personal care services, skilled nursing care in the home, etc.), waiver services or institutional based Medicaid services.

Most MAGI applicants apply online at the NY State of Health Insurance Marketplace, with exceptions as listed above. All others apply at a local Medicaid office. In addition, Medicaid recipients must periodically recertify for the Medicaid benefit. MAGI recipients who applied through the NY State of Health Marketplace will renew through the marketplace, unless they subsequently transferred back to the local district because they receive certain Medicaid services, as listed above. MAGI-like recipients who applied through the local Medicaid office prior to the implementation of the ACA have been transferred to the NY State of Health Marketplace, and will also recertify through the Marketplace. All others renew through the local Medicaid office

Other Benefits under the Medicaid Program


Types of home care include medical home health services, personal care services, and private duty nursing. See below, Medicaid Home Care for information about these services.


Individuals, who are otherwise eligible for Medicaid, except their household income is over the Medicaid income guideline, may be eligible for Medicaid through the Medicaid Spenddown program. The “spenddown” refers to the amount of monthly income the household exceeds the Medicaid income guidelines.

Under the spenddown program, the household must incur monthly medical expenses equal to or in excess of their monthly spenddown amount. Once the monthly spenddown has been met in a calendar month, Medicaid will cover any additional medical care expenses the household incurs during that calendar month. See below, Medicaid Spenddown Program, for additional information.


Medicaid waivered programs are programs in which the federal government “waives” or makes an exception to the Medicaid rules, and thereby allows Medicaid to pay for services that are normally not covered under the Medicaid program. The usual purpose is to provide services that can be delivered at home or in the community to patients who would otherwise need to be in a residential institution. See below, Home and Community Based Waiver Services, for more information.


Medicaid may help pay for the cost of institutional long-term care. Institutional care includes services provided in skilled nursing facilities (SNF) known as “nursing homes,” health-related facilities, intermediate care facilities, or residential treatment facilities, alternate level of care provided in a hospital to persons whose acute care needs have already been met but who are awaiting placement in an SNF. See below, Institutional Medicaid for information regarding financial eligibility.


Under certain circumstances when SSI recipients become entitled to Social Security disability benefits based on their parent’s record, they may lose their SSI cash benefits. However, they should continue to maintain their Medicaid benefits, even if over the income guidelines. This is known as the Disabled Adult Child Provision. See below, Additional Medicaid Benefits, Disabled Adult Child (DAC) Provision.


Eligible individuals will have access to family planning services from all Medicaid enrolled family planning providers. See below, Additional Medicaid Benefits, Family Planning Benefit Program.


The Medicaid Cancer Treatment Program for breast and/or cervical cancer or colorectal and/or prostate cancer provides full Medicaid coverage for individuals whose income is higher than the Medicaid medically needy income levels. See below, Additional Medicaid Benefits, Medicaid Cancer Treatment Program.


Medicaid participants may be eligible to receive transportation for scheduled medical appointments. See below, Additional Medicaid Benefits, Medicaid Transportation.


The Medication Grant Program pays for medications and services to treat mental illness for people with serious and persistent mental illness who have filed a Medicaid application prior to or within seven days of discharge/release from hospitals or correctional facilities. See below, Additional Medicaid Benefits, Medication Grant Program.


New York State established the AIDS Health Insurance Program (AHIP) in 1991 to assist persons with AIDS or HIV-related disease maintain their health insurance coverage after loss or reduction of employment. AHIP uses Medicaid funds to pay health insurance premiums. Refer to Health Programs, AIDS Health Insurance Program.


The COBRA Continuation Coverage Program was established by New York State to assist eligible persons in maintaining their health insurance coverage after loss or reduction in employment. The program uses Medicaid funds to continue payment of the health insurance through the employee-sponsored COBRA health insurance program. Refer to Health Programs, COBRA Continuation Coverage, Medicaid COBRA Program for more information.


The Medicaid Buy-In for Working People with Disabilities program provides Medicaid coverage for individuals with disabilities who are working and who meet certain financial criteria. Refer to Health Programs, Medicaid Buy-In for Working People with Disabilities.


Households whose Cash Assistance case closes because of employment income can continue to receive Medicaid for a maximum of 12 months, known as Transitional Medicaid Assistance. Each household member will retain his/her Medicaid card, and remain in the same managed care plan, if enrolled in managed care. Transitional Medicaid Assistance (TMA) begins the first of the month immediately following the month in which the CA case is closed for employment. Refer to Cash Benefits, Cash Assistance, Returning to Work, Transitional Medicaid Assistance.