Medicaid Overview
Medicaid is a health insurance program jointly operated by the federal and state governments for low-income adults, children, pregnant women, seniors, and people with disabilities. Because each state manages its own program with federal support, the specific names (e.g., NJFamilyCare in New Jersey) and eligibility requirements may vary by state; however, it fundamentally serves as a vital medical safety net for vulnerable populations.
Features and Benefits
- Low Cost Burden: Eligible beneficiaries pay little to no monthly premiums, and out-of-pocket costs (copays) for doctor visits or prescriptions are also free or very inexpensive.
- Broad Range of Medical Services: In addition to general doctor visits and hospital services, it provides extensive coverage for dental, vision, prescription drugs, and long-term care services that are often difficult to cover with private insurance.
- Year-Round Enrollment: Unlike general health insurance with fixed enrollment periods, beneficiaries can apply for and receive Medicaid benefits at any time of the year as long as they meet the eligibility requirements. Once eligibility is confirmed through the review process after application, coverage begins on either the date of application or the first day of the month in which the application was submitted.
Types of Medicaid
- Pregnancy Medicaid: Pregnancy Medicaid covers all medical expenses during pregnancy, including prenatal screenings, childbirth, and newborn care. In many states, including New Jersey, coverage is extended for up to 12 months postpartum. (Availability varies by state.)
- Children’s Health Insurance Program (CHIP): CHIP is provided at a low cost for children (Under 19 years of age) in families whose income is higher than Medicaid limits but insufficient to afford private insurance.
- ACA Medicaid (Medicaid Expansion): ACA Medicaid was expanded through the ACA (Affordable Care Act), widely known as Obamacare. ACA Medicaid expanded eligibility to include all low-income adults with a household income at or below 138% of the Federal Poverty Level, regardless of parental or disability status.
- Regular Medicaid (ABD Program): Regular Medicaid provides essential medical services and long-term care benefits to low-income individuals who are Aged (65+), Blind, or Disabled and meet specific income and asset criteria.
- Long-Term Care Medicaid (LTC): LTC provides financial support for low-income seniors or individuals with disabilities who have mobility issues, covering the costs of Nursing Home placement or HCBS (Home and Community-Based Services) so they can receive caregiver assistance within their own homes or community settings.
Eligibility
- Income and Asset Screening: Eligibility follows the Federal Poverty Level (FPL) guidelines announced by the government each year. Specifically, Long-Term Care Medicaid involves strict screening of not only income but also held assets (cash, savings, etc.).
- Immigration Status: Generally, the primary eligibility is for U.S. citizens or Lawful Permanent Residents (Green Card holders) who have held their status for at least five years. However, for pregnant women or children, more relaxed criteria may apply depending on state regulations.
Medicaid vs. Medicare Q&A
Q1. Both are government programs, so what is the difference?
A. The biggest difference is "who" the target audience is.
- Medicare: Based on age. It is a federal program for anyone age 65 or older, or those with certain disabilities, regardless of wealth. Think of it as a “right” earned by paying taxes while working.
- Medicaid: Based on income. It is a joint federal and state-funded program, run by individual states, designed to help those with limited income and assets, regardless of their age.
Q2. How do the medical costs differ?
A. Medicare pays "part" of the cost, while Medicaid pays "almost all" of it.
- Medicare: Outpatient and physician services (Part B) cover 80% of the Medicare-approved amount, leaving the remaining 20% and the annual deductible as out-of-pocket expenses. Inpatient hospital services (Part A) are subject to a separate cost-sharing structure, which includes a deductible and daily copayments based on the length of the hospital stay.
- Medicaid: Covers almost all remaining out-of-pocket costs that Medicare doesn’t pay. It also helps cover premiums and prescription drug costs.
Q3. Is the cost of a Nursing Home fully covered?
A. This is where the biggest difference lies.
- Medicare: Medicare covers up to 100 days of Skilled Nursing Care only when a physician deems it necessary following a formal inpatient hospital stay of at least three days. The cost-sharing structure is as follows: $0 for days 1–20; $217 per day for days 21–100 (as of 2026); and the full cost thereafter from day 101. Please note that Custodial Care, such as assistance with meals, bathing, and mobility, is not covered by Medicare.
- Medicaid: Supports long-term care. Medicaid covers nursing home costs or home health aide services (Home Care).
*Observation Status is not recognized as a formal inpatient admission, which may result in a denial of Skilled Nursing Facility (SNF) benefits. When admitted, be sure to confirm with the hospital whether your status is officially inpatient.
Q4. I have both. What does that mean?
A. You have Dual Eligibility.
- If you hold both Medicare and Medicaid cards, you are considered Dual Eligible.
- You can enroll in a Dual Special Needs Plan (D-SNP), which coordinates the benefits of both programs into one integrated plan for more efficient care. Specific name of the D-SNP plan may vary by state.
- When you receive medical services under a D-SNP, Medicare acts as the primary payer, covering its portion first. Medicaid then serves as the secondary payer to cover the remaining costs. For more details visit our D-SNP page.
Q5. What happens if I move to another state?
A. Original Medicare stays the same; Medicaid must be reapplied for.
- Medicare: Since it is a federal program, you can use your Medicare plan anywhere in the United States without issue (Original Medicare only).
- Medicaid: Policies vary by state. If you move from New Jersey to New York, you must close your New Jersey coverage and apply for New York Medicaid to undergo a new eligibility review.
