This fact sheet addresses common misconceptions about Medicaid, a program that serves as an effective safety net for those who are unable to pay for health and long-term care.
Medicaid is a federal/state partnership that does much more than provide health insurance for the poor. Medicaid is our nation's largest health insurer, covering one in six Americans. It covers two-thirds of nursing home residents,1 one in five persons under age 65 with chronic disabilities,2 more than one-quarter of children,3 and well over one-third of all births.4
A look at the facts about Medicaid shows common misconceptions about the program are simply myths.
Myth # 1: Anyone who is poor can receive Medicaid.
Facts: Millions of Americans, no matter how poor, cannot receive Medicaid because they do not fit into a federally recognized eligibility category.5 The majority of those excluded are adults who do not fit into one of these categories: low-income pregnant women; low-income adults caring for dependent children; low-income persons age 65 and older; and low-income people with “qualifying” disabilities. Some states provide much-needed coverage to adults without dependent children through “special” waivers; however, in 2006, 55 percent of uninsured adults under age 65 with income at or below the federal poverty level were not “categorically” eligible for Medicaid.6
Myth # 2: Most Medicaid beneficiaries are on welfare.
Facts: The vast majority of persons enrolled in Medicaid today receive no cash welfare assistance.7 Instead, Medicaid has evolved into a health insurance program that provides a safety net for the working poor and their children who otherwise would not have insurance.
Myth # 3: Most Medicaid beneficiaries are not working.
Facts: In 2007, 62 percent of all noninstitutionalized Medicaid beneficiaries lived in families where one or more persons worked.8 Workers were typically employed in low-wage jobs that did not offer employer-sponsored health insurance coverage, or that offered coverage that their workers could not afford. Between 2002 and 2007, the percentage of the population that had employer-sponsored health insurance coverage decreased from 62 percent to 59 percent.9
Myth # 4: Hardworking middle-class people who save for their retirement years will not need to rely on Medicaid for long-term care.
Facts: Medicare and private health insurance do not cover most long-term care (LTC) expenses,10 making Medicaid the “safety net” for many middle-income persons. To receive Medicaid LTC services, these individuals must become impoverished and deplete almost all of their assets.11