Medicaid is a Federal - State entitlement program that pays for medical services on behalf of certain groups of low income persons. (O'Sullivan, 1990) Title XIX of the Social Security Act provides for the medical assistance commonly known as Medicaid. (O'Sullivan, 1990) This means-tested entitlement program became part of federal law in 1965. Medicaid makes direct payments to medical providers for their services to eligible persons. It is the largest health program providing medical assistance to the poor.


In order for one to be eligible for Medicaid, one must meet very strict requirements. These requirements vary from state to state, but in this paper the Federal requirements will be discussed as well as the general state requirements The correlation between those receiving public assistance and those receiving Medicaid seems to be directly related. "Medicaid has generally been linked to actual or potential receipt of cash assistance under a welfare program. Thus, eligible individuals have to meet the welfare definitions of age, blindness, disability, or membership in a family with dependent children where one parent is absent or incapacitated." (O'Sullivan, 1990) These stringent requirements leave out part of the population such as singles, childless couples who are not elderly or disabled.

Besides falling into one of the above mentioned categories, they must also meet specified income and resource criteria which vary by State. "While the link to cash assistance has been the primary way to establish eligibility, states have been able to extend coverage to children who meet the income and resources requirements, but do not meet the definition of dependency." (O'Sullivan 1990).

The other group that is affected by this institutional policy are the providers. Providers can be defined as those who perform services for the Medicaid patients. They include, but are not limited to physicians, hospital, dentists, pharmacies etc. "Low medical fee schedules, relative to physicians' usual charges to other payers, are a major deterrent to participation." (O'Sullivan 1990) Recent data suggests that the gap continues to widen between Medicaid and private rates. Virtually all hospitals participate in Medicaid. However, a Medicaid patient will more than likely be transferred to a public hospital for in-patient treatment.


Social Impact

It is merely impossible to try to obtain an actual number of people affected by Medicaid. If the picture was painted with a broad brush you could say that virtually every person in the United States is affected by Medicaid. For example any person who pays taxes is affected, any doctor who accepts Medicaid is directly affected by the low fee schedule that is put into place. Any person receiving public assistance is affected as well. The amount of people who are currently receiving Medicaid will be broken down: 6.2 million or 24.9 percent adults in families with dependent children, 10.4 million or 41.8 percent dependent children, 3.5 million or 14.1 percent aged, .4 million or 13.7 percent disabled or blind, 1.4 million or 5. 6 percent fall into the category of others. (O'Sullivan 1990) The total amount of people on Medicaid is 24.9 million. It's obvious that practically everyone is affected by this program.

Problems With the System

The Medicaid program was one of many programs designed to help the poor and disadvantaged enjoy the benefits of receiving the type of medical care provided to those who could afford it. According to Karen Davis, author of Achievements and Problems of Medicaid, from its initiation the Medicaid program has had two major objectives: insuring that covered persons receive adequate medical care and reducing the financial burden of medical expenditures for those with severely limited financial resources. Before the introduction of Medicaid most poor persons had little or no private insurance and many went without needed care. Medicaid attempted to alleviate this situation - if not for all poor persons, at least for those on welfare and the medically needy. (Davis, 1996)

A Lack Of Equality

Perhaps the greatest flaw in the Medicaid program is that it does not treat people in equal circumstances equally. Davis goes on to say that the inequitable distribution of Medicaid benefits is caused in part by the joint Federal - State nature of the program and its tie to the Welfare system. As stated previously the Medicaid eligibility is linked to the Welfare system. Therefore Medicaid is working within the complexity of the Welfare system, which, as we all can understand, is virtually impossible to work in conjunction with, due