Medicaid, created in 1965, is a public insurance program that is designed to provide health coverage to low income individuals and families, of which include children, parents, elderly, and those who are disabled. Medicaid is jointly funded by the federal and state governments. Each state operates its own program within federal guidelines, though these guidelines allow for much flexibility in designing and administering their programs. As a result of this, Medicaid eligibility varies widely from state to state. Considered to be an entitlement program, those who meet the eligibility requirements have the right to receive the coverage.. In 2008 Medicaid was projected to provide coverage for close to 63 million low-income Americans, 31 million of those being children, 17 million being adults, 6 million seniors, and 10 million citizens with disabilities. Though children make up nearly half of all Medicaid enrollees, they only account for one-fifth of spending. Seniors and the disabled only account for one-quarter of enrollees but two-thirds of spending. Medicare is a federally administered program for those who are over 65 and some who are disabled, but there are 7 million citizens who fall into the "duel eligibility."
As of 2008 there are mandatory populations that must be covered for states to receive federal funding. Those include children under 6 and pregnant women below the poverty line, which in 2008 was $17,600 for a family of three. Not all low income citizens are eligible for Medicaid however. Adults over 21 who are not disabled, pregnant, or elderly are not eligible no matter how poor they are.
In the state of Michigan, Medicaid provides basic physical and mental health services to low income citizens, seniors, and those with disabilities. The newly elected Governor Rick Snyder has proposed some changes to Medicaid in his 2011 budget proposal in response to budget deficits. His budget includes a new one percent health care insurance claims assessment on all paid health care insurance claims. This one percent tax is replacing the six percent Medicaid HMO tax that generated $400 million a year. There are some fears that this could cost hospitals millions of dollars. Snyder plans to keep over $780 million of federal funds to maintain the existing Medicaid reimbursement rates to Michigan's health care providers including hospitals, nursing homes, and health maintenance organizations.
In order to save money, Snyder will take the "dual eligibility" citizens and integrate them into a managed care service delivery model that will save $10 million. The goal of this is to increase efficiency and provide greater care coordination for the elderly, many of whom have multiple chronic diseases. Including a lifetime limit of 48 months to be eligible, with exemptions for hardship and incapacity, it is expected to save $77.4 million. Other cuts would be to reduce the hourly rates paid to unlicensed aides and relatives in the child day care program, and the closing of one boys juvenile training school with the condensing of another.
Although Snyder's budget cuts may be controversial , especially with the rising concern of the lack of health care providers in Michigan, his proposed cuts were less than many had expected.