Medicare and Medicaid are often confused. While Medicare is a government-sponsored health insurance plan for people who are 65 and over, Medicaid is an assistance program that helps to provide health insurance for people with low or no income at a reduced cost. However, the question "what does Medicaid cover?" can get complex because coverage varies from state to state.

To help you better understand what Medicaid covers on both the federal and state level, and how to determine if you might qualify, here's what you need to know.

What Is Medicaid?

Medicaid is a joint federal and state assistance program. It has no age limit and helps offer medical care at low or no cost to those who qualify with limited income and resources. Depending on your state, it may also provide some services not traditionally covered by Medicare, such as nursing care.

Medicaid provides assistance for low-cost or no-cost healthcare and limits out-of-pocket fees through federal and state funding. However, it is not a health care program in and of itself. Each state chooses approved providers to work with, and those providers receive funding for your care, which helps reduce your own costs. Depending on where you live, you may need to contribute to a small co-pay every month. When you get medical treatment, the program sends money to your medical providers to cover the cost of your care.

Medicaid is a state and federal partnership, which means the federal government sets the core eligibility requirements and benefits, and the states run the programs. Every state must meet these minimum federal guidelines. However, additional benefits and administration may vary from state to state.

Who Qualifies for Medicaid?

While Medicare primarily serves as a health insurance program for those over 65, regardless of income, Medicaid serves qualifying members of any age.

However, if you are over 65 and qualify based on your income, disabilities or health, you may enroll in both Medicare and Medicaid at the same time. In this case, any expenses not covered by Medicare will get picked up by Medicaid.

At the federal level, to qualify for Medicaid, applicants need to meet three qualifying factors. They must:

• Reside in the state where they are applying for assistance.
• Meet the income requirements.
• Be a U.S. citizen or permanent lawful resident.

Medicaid beneficiaries tend to fall into three primary groups:

• Families with qualifying low income, including children under 18 and expecting mothers.
• Individuals with qualifying disabilities, including children and adults, regardless of age.
• Older adults, such as those over 65, who have low-income or disabilities and need help with covering healthcare expenses.

The exact eligibility requirements for Medicaid depend on where you live and if your state has expanded its Medicaid coverage. In every state, you may qualify for coverage based on your income, your household size or a disability that you have. You will likely need to submit proof of residency, financial information and medical history during the application process.

In states that have expanded Medicaid, you may qualify solely based on your income if it's 138% below the federal poverty level. In 2022, the federal poverty level for an individual is $12,880. For every additional person in your family, the income level increases, to a maximum of $44,660.

Federal Mandatory Benefits

To participate in the assistance program and receive federal funding, states must provide core minimum standards for low-income families, individuals with disabilities and older Americans with limited incomes.

These federal core benefits include:

• In and outpatient hospital services.
• Early and periodic screening, diagnostic and treatment services (EPSDT).
• Nursing facility and home health services.
• Doctor visits.
• Services provided by rural health clinics and federally qualified service centers.
• Family planning and midwife services.
• Certified pediatric and nurse practitioner services.
• X-rays and laboratory services.
• Licensed and recognized freestanding birth centers.
• Transportation for emergency services and medical care.
• Tobacco cessation programs for pregnant individuals.

Every state must provide these benefits fairly and equitably for enrollees in order to qualify for federal funding.

For states that have not yet decided to expand Medicaid coverage, every program participant will still be eligible to receive the federal core benefits as part of their enrollment.

As you explore your options, it's also important to know what Medicaid doesn't cover. First, it does not travel with you outside the United States. Second, Medicaid doesn't cover anything that's not deemed medically necessary or not approved by your insurer. If you have questions, speak with both your medical provider and your local Medicaid office to confirm.

State-by-State Optional Benefits

If a state chooses to expand Medicaid, then additional optional benefits may be added to the coverage list for that state. States may also extend the pool of potential beneficiaries to cover more people.

Each state chooses providers for coverage, and some contract with private insurance companies. Providers must be federally approved for Medicaid. The number of providers available may vary by state as well, with some states having a single provider and others offering three or more. Review the details for your state to learn more about potential providers.

Some of the optional additional benefits states offers may include, but aren't limited to:

• Prescription drug coverage.
• Some non-prescription drugs, such as vitamins.
• Vision and dental care, including dentures.
• Rehabilitative services.
• Physical and occupational therapy.
• Speech therapy.
• Podiatry services.
• Durable medical equipment.
• Chiropractic services.
• Respiratory care.
• Prosthetic devices.
• Inpatient and hospital care for mental diseases.
• Hospice services.
• Primary care case management.

Currently, 38 states and the District of Columbia have expanded their Medicaid offerings to residents. However, that doesn't mean each of those 39 programs has identical coverage. Care coverage, as well as cost, will vary from state to state, so be sure to check your local availability.

What Does Medicaid Cover in Your State?

Because the details of what Medicaid covers can vary wildly from state to state, it's critical that you learn the guidelines for where you live. Keep in mind that while every state has a Medicaid-associated website, the program names may be different. In Massachusetts, for example, Medicaid is called MassHealth, and in South Carolina, it's called Healthy Connections.

A good place to start is Medicaid.gov. There, you'll find links, enrollment information and a list of instructions on how to apply for Medicaid for every state.

Once you've explored how Medicaid works in your state, make an appointment with your local Medicaid office and speak with them in person or over the phone. They can help you determine your eligibility, explain the benefits available in your state and guide you through the application process.

Finding the Right Insurance for Your Needs

Choosing insurance can feel daunting, especially once you don't have an employer-sponsored plan anymore. The key to moving forward and picking the best plan for your needs is ensuring that you know all of your options. Once you've done some research and you understand what's available, it can be a lot easier to pick the coverage that's best for you.