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 (the premium tax credit and cost sharing reduction benefit) 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.
A lawsuit was originally brought against the constitutionality of the ACA eventually landing on the doorsteps of the U.S. Supreme Court. In June 2012, the Court upheld the constitutionality of the ACA, thus upholding all provisions of ACA (including Medicaid’s expansion). However, the Court did create a provision allowing states the option to expand Medicaid or not.
But a second lawsuit was brought against the ACA in 2018. Originally when the U.S. Supreme Court upheld the ACA’s individual mandate in 2012, it was based on Congress’s taxing power. Congress, the Supreme Court said, could legally impose a tax penalty on people who do not have health insurance. But when the tax penalty was essentially eliminated under the Tax Cuts and Jobs Act of 2017, appellants argued that since the tax penalty was zeroed out the individual mandate became unconstitutional. And since the individual mandate was unconstitutional so was the rest of the ACA since the rest of the law could not be severed from the individual mandate (that is, the other provisions of the ACA could not survive because they were inseparably linked to the individual mandate).
This case also found its way to the U.S. Supreme Court and on June 17, 2021, the Supreme Court once again reaffirmed the constitutionality of the ACA, further cementing the law as a cornerstone of the U.S. health system.
As of February 2021, thirty-eight states – including NYS, plus Washington DC, 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. For the latest information visit For the latest information visit: https://www.healthinsurance.org/medicaid/.
WHO ADMINISTERS THE PROGRAM
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.
Federal rules mandate the overall parameters of the program, including a set of health benefits that must be offered. Medicaid, however, 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 NYS 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 NYS 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.
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 for the elderly, as well as the disabled and blind with Medicare. HRA no longer has jurisdiction over pregnant women, parents/caretaker relatives with children under 19, children through age 18 or adults 19 through 64 without Medicare, unless in need of designated services, such as community-based long-term care services, managed long-term care enrollment, 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.
Except for 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.
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
Medicaid is a needs based health benefit for low income individuals and families. Medicaid in NYS provides a comprehensive benefit package that covers health providers, in-patient and outpatient services, dental care, home health care, prescription drug coverage, long term care, and much more. All Medicaid recipients in the 62 counties within NYS are mandated to receive services through a managed care plan, unless they meet an exemption or exclusion. 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.
With the implementation of the Affordable Care Act, who qualifies, where and how to apply or renew for Medicaid, as well as how to appeal denials/terminations depends on whether the applicant/recipient is MAGI Medicaid or non-MAGI Medicaid, a delineation between Medicaid population groups created by the ACA. The MAGI population groups include pregnant women, dependent children under the age of 19, parents/caretaker relatives of children under 19, singles/childless couples ages 19 through 64 who are not entitled to or enrolled in Medicare. Non-MAGI population groups include the aged (65 and over), the disabled and blind with Medicare.
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 or the non-MAGI eligibility group or when receiving certain types of Medicaid services, such as community-based long-term care services, waiver services or institutional based Medicaid services.
Most MAGI applicants apply online at the NY State of Health Insurance Marketplace, with certain exceptions. Non-MAGI applicants apply at a local county’s Medicaid office or HRA in NYC. In addition, Medicaid recipients must periodically recertify for the Medicaid benefit. MAGI recipients will renew through the NY State of Health marketplace, unless they were transferred back to the local district. All others renew through the local Medicaid office.
Other Benefits under the Medicaid Program
MEDICAID HOME CARE SERVICES
Medicaid provides home care services or community based long-term care services, which includes personal care services, certified home health services: personal care assistance, plus a higher level of nursing care, adult day health care, private duty nursing services, consumer directed personal assistance program (CD-PAP), hospice services. See below, Medicaid Community Based Long Term Care Services for information about these services.
To qualify for CBLTC individuals must be Medicaid eligible and meet the medical criteria for the above listed services. How an individual accesses CBLTC services depends on whether the individual is MAGI Medicaid, Non-MAGI Medicaid on Medicaid Spenddown, an SSI recipient, or excluded/exempt from enrolling in managed care.
MEDICAID SPENDDOWN PROGRAM
Individuals, who are otherwise eligible for Medicaid, whose 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. The spenddown is calculated based on the non-MAGI income levels.
Under the spenddown program, the household must incur monthly medical expenses equal to or greater than 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. This is covered under a different chapter, refer to, Medicaid Spenddown Program, for additional information.
HOME AND COMMUNITY BASED SERVICES WAIVER
Medicaid Home and Community Based Services (HCBS) are available through a waiver program that permits a state to furnish an array of home and community-based services and supports, typically not available through the state’s Medicaid plan, to individuals who would otherwise require an institutional level of care, thus allowing them to live in the community and avoid institutionalization. HCBS is authorized under 1915© of the Social Security Act.
In New York State, the HCBS waiver programs include:
- The Consolidated Children’s Waiver;
- Nursing Home Transition and Diversion (NHTD);
- Traumatic Brain Injury (TBI); and
- Office for People with Developmental Disabilities (OPWDD).
See below, Home and Community Based Services Waivers, for more information.
Medicaid may help pay for the cost of long-term institutional care when an individual no longer resides in the community and becomes a permanent resident of a facility that assumes the total care of an individual. These facilities include skilled nursing homes (SNF), 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.
The rules for income and resources for institutional Medicaid are different than for community-based eligibility and transfer of certain assets/resources may delay eligibility for Medicaid for institutional services.
To apply for institutional services, the applicant must provide documentation of all assets during the “look-back period.” The look-back period is 60 months. The applicant must also disclose any transfers of assets for less than fair market value (i.e., gifts) during the look-back period.
See below, Institutional Medicaid for more information.
DISABLED ADULT CHILD (DAC) PROVISION
Under certain circumstances when SSI recipients become entitled to Social Security Disability Insurance 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.
FAMILY PLANNING BENEFIT PROGRAM
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.
MEDICAID CANCER TREATMENT 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.
MEDICATION GRANT PROGRAM
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.
COBRA CONTINUATION COVERAGE 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.
MEDICAID BUY-IN FOR WORKING PEOPLE WITH DISABILITIES
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.
TRANSITIONAL MEDICAID ASSISTANCE
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 their 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.