Medicaid

How It Works

Medicaid is the largest source of health insurance coverage in the United States by enrollment. It covers low-income adults, children, pregnant women, elderly, and people with disabilities. Each state administers its own Medicaid program within federal guidelines, setting its own eligibility rules and provider payment rates. Medicaid typically pays hospitals 60-80% of what Medicare pays — and even less in some states. This payment gap means hospitals that serve a high proportion of Medicaid patients (disproportionate share hospitals, or DSH hospitals) face financial strain and may receive supplemental government payments.

Related Terms

• Medicare — Federal health insurance for Americans aged 65+ and certain younger people with disabilities — covering hospital stays (Part A), outpatient care (Part B), and prescription drugs (Part D).
• Centers for Medicare & Medicaid Services (CMS) — The federal agency that administers Medicare, Medicaid, and the ACA marketplace — setting hospital payment rates, quality standards, and the data that HospitalCostData uses.