On April 28, the Kaiser Family Foundation (KFF) released a brief examining the relationship between the federal and state governments in financing and administrating Medicaid.  The brief notes that, under the current structure, states must meet core federal requirements but may also exercise broad flexibility in certain programmatic areas.  The authors assert that, under the national health care reform law, the federal government has increased state requirements but also provided new options and incentives for states to increase Medicaid’s role in expanding health coverage.  Noting that some state officials have expressed dissatisfaction with the law’s requirements, the brief highlights key issues in the federal-state Medicaid relationship, including: eligibility, benefits, cost sharing, service delivery, provider payment, and dual eligibles.  The brief concludes that the importance of the federal-state relationship will grow as Medicaid expands under health reform and federal lawmakers seek opportunities to reduce the deficit through changes to Medicaid.

From the report:

Medicaid was originally enacted in 1965 to enable states, at their option, to furnish medical assistance, as well as rehabilitative and other services, for certain families and aged, blind, and disabled individuals whose income and resources are insufficient to meet the costs of medically necessary services. The program has evolved over time, and, today, Medicaid serves as the nation’s primary health insurance program for low‐income and high‐need individuals. Under the Affordable Care Act (ACA), Medicaid will expand in 2014 to become the base of coverage for the low‐income population. This brief presents an overview of the current Medicaid program framework, with a focus on eligibility, benefits and cost sharing, care delivery and provider payment, long‐term services and supports, and dual eligibles.

Full Report: Federal Core Requirements and State Options in Medicaid: Current Policies and Key Issues (PDF | 1.2 MB)

Kaiser Family Foundation. (2011). Federal core requirements and state options in Medicaid: current policies and key issues.