Understanding Mandatory & Optional Medicaid Benefits

Family caregivers must jump through many hoops to get the right coverage for their loved ones through Medicaid. The Medicaid program provides health coverage to millions of low-income families in America. The government works with each state to provide Medicaid benefits. Some benefits are mandatory or required by law for all state Medicaid programs. Other benefits are optional, meaning states can choose whether to offer them. How can you find the right services for your loved one?

What is Medicaid? 

Medicaid is a joint federal and state program in the United States designed to assist those with limited income and resources in accessing healthcare services.

Unlike Medicare, which is primarily for individuals over the age of 65, Medicaid serves a diverse population, including low-income adults, children, pregnant women, elderly adults, and people with disabilities.

The program is funded by the federal government and individual state governments, allowing for variation in coverage and eligibility criteria from state to state.

Medicaid is critical in the American healthcare system, offering various services, from routine healthcare and hospital visits to long-term care. The program provides essential health services to millions of Americans and acts as a safety net for those who may otherwise be unable to afford medical care.

Its coverage can include mandatory benefits, such as inpatient and outpatient hospital services, and optional benefits, which states can choose to provide, like prescription drugs and physical therapy.

Mandatory Medicaid benefits

Mandatory benefits refer to the healthcare services state Medicaid programs must offer by law. These benefits guarantee access to essential medical services to care recipients with limited financial means. These include:

• Transportation to Medical Care: Medicaid covers the cost of transportation to medical facilities for beneficiaries to receive healthcare services.
• Inpatient Hospital Services: This benefit includes room, board, and general nursing in a hospital, along with other hospital services essential for the diagnosis and treatment of the patient.
• Outpatient Hospital Services: Medicaid provides coverage for medical services received on an outpatient basis at a hospital, including diagnostics, treatments, and consultations.
• Rural Health Clinic Services: Medicaid supports services provided by rural health clinics, focusing on primary care and preventive health services in rural areas.
• Federally Qualified Health Center Services: These services cover outpatient health services from federally qualified health centers, including primary care and preventive services.
• Laboratory and X-ray Services: Medicaid covers essential laboratory tests and X-ray services that are medically necessary for diagnosis and treatment.
• Nursing Facility Services: This includes long-term care services provided in nursing facilities for individuals who require a nursing home level of care.
• Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) Services: Medicaid provides comprehensive and preventive health care services for children under 21, including regular check-ups and treatments necessary to correct health conditions.
• Family Planning Services: This benefit includes various contraceptive services, supplies, and family planning-related education and counseling.
• Tobacco Cessation Counseling for Pregnant Women: Medicaid offers counseling services to pregnant women to aid in tobacco cessation, promoting healthier pregnancies.
• Physician Services: This covers services provided by licensed physicians, including consultations, examinations, and medical treatments.
• Home Health Services: Medicaid provides certain health care services in the patient's home, typically for those who are homebound and need skilled care.
• Nurse Midwife Services: This includes a range of maternity and gynecological care provided by certified nurse-midwives.
• Certified Pediatric and Family Nurse Practitioner Services: Medicaid covers services provided by certified pediatric and family nurse practitioners, including primary and preventive care.
• Freestanding Birth Center Services: Medicaid supports childbirth and related maternity care services provided in licensed or recognized freestanding birth centers.
• Medication Assisted Treatment (MAT): This benefit includes pharmacotherapy, counseling, and other forms of treatment for individuals with substance use disorders.
• Routine Patient Costs in Qualifying Clinical Trials: Medicaid covers routine costs associated with participation in qualifying clinical trials, such as tests and hospital stays.

States are required to provide certain benefits under the Medicaid program. These mandatory benefits include hospitalization, prescription drugs, and preventative care. If a state were to try to cut these benefits, they could lose federal funding for their Medicaid program.

Optional Medicaid benefits 

Optional benefits refer to additional services Medicaid programs can offer beyond the mandatory benefits they must cover. These benefits vary by state, including dental, vision, and prescription drugs. 

These services add to the healthcare coverage Medicaid provides and improve the health and well-being of those eligible for the program. Care recipients can receive additional support, care, and resources by using these services. Some expected optional benefits are:

• Other Licensed Practitioner Services: Coverage for services provided by healthcare practitioners other than physicians under state-defined scopes of practice.
• Private Duty Nursing Services: Medicaid offers one-on-one nursing care provided in the home for individuals requiring more intensive nursing care.
• Clinic Services: This benefit covers services received at a clinic, including preventive, diagnostic, therapeutic, rehabilitative, or palliative services.
• Dental Services: Medicaid may cover dental care, including routine check-ups, cleanings, x-rays, fillings, and extractions.
• Physical Therapy: Coverage for physical therapy services aimed at improving or restoring physical function impaired or lost due to injury or illness.
• Occupational Therapy: Medicaid may cover services that improve everyday skills following illness or injury.
• Speech, Hearing, and Language Disorder Services: Services for diagnosing and treating speech, hearing, and language disorders are covered.
• Prescription Drugs: Medicaid provides coverage for prescribed medications, subject to state formulary guidelines.
• Dentures: Coverage includes partial or complete dentures for eligible individuals.
• Prosthetics: Medicaid may cover prosthetic devices that replace missing body parts.
• Eyeglasses: Coverage for prescription glasses, including frames and lenses.
• Other Diagnostic, Screening, Preventive, and Rehabilitative Services: Services aimed at preventing disease, promoting health, and restoring function.
• Services for Individuals Age 65 or Older in an Institution for Mental Disease (IMD): Coverage for mental health services provided in specialized institutions for older individuals.
• Services in an Intermediate Care Facility for Individuals with Intellectual Disabilities: Medicaid covers services in facilities for those with intellectual disabilities, providing ongoing care and treatment.
• Inpatient Psychiatric Services for Individuals Under Age 21: Coverage includes psychiatric care in a hospital setting for those under 21.
• Hospice: Medicaid provides hospice care for terminally ill patients, including medical, counseling, and palliative care.
• Case Management: Services to assist eligible individuals in accessing needed medical, social, educational, and other services.
• TB-related Services: Specific services related to the treatment of tuberculosis.
• Respiratory Care for Ventilator-Dependent Individuals: Coverage for specialized respiratory care, particularly those dependent on ventilators.
• Personal Care: Medicaid may cover services that assist with activities of daily living, like bathing, dressing, and eating.
• Primary Care Case Management: A system where a primary care provider coordinates all health care services to ensure continuity of care.
• Primary and Secondary Medical Strategies for Sickle Cell Disease: Coverage includes treatment and services specifically for individuals with sickle cell disease.
• State Plan Home and Community-Based Services: Medicaid funds services that allow individuals to receive care in a home or community setting rather than an institution.
• Self-Directed Personal Assistance Services: This benefit allows individuals to direct their own care, choosing the services and caregivers that best fit their needs.
• Community First Choice Option (CFC): Offers attendant care and related services to individuals who otherwise might require institutional care.
• Alternative Benefit Plan (ABP): States can offer alternative benefits to certain Medicaid enrollees, often tailored to specific needs.
• Health Homes for Enrollees with Chronic Conditions: Medicaid provides a coordinated care approach for individuals with chronic conditions, integrating various health services.
• Other Services Approved by the Secretary: This allows for Medicaid coverage of additional services deemed necessary and approved by the Secretary of Health and Human Services.

Each state can decide which optional benefits to include in its Medicaid packages. This decision is based on the state's budget and priorities. The goal is to address the significant healthcare needs of their residents.

Determining which Medicaid benefits are mandatory and optional in your state

To determine which services Medicaid covers, visit your state's official Medicaid website or contact the state's Medicaid agency directly. Each state has its own Medicaid program, which operates within federal guidelines but can vary significantly regarding covered services and eligibility criteria. 

On the state Medicaid website, one can usually find detailed information about both mandatory and optional benefits provided, as well as any state-specific programs or waivers. 

Additionally, contacting the state Medicaid office by phone or person can provide personalized assistance, especially for complex situations or specific needs. 

Consulting with their healthcare provider or a Medicaid-enrolled specialist can also offer insights into covered services for individuals already enrolled in Medicaid. In some cases, healthcare providers are knowledgeable about state-specific Medicaid coverage and can advise patients on what services they can receive under their plan. 

Community health organizations and local non-profits often have resources and expertise in navigating state Medicaid programs and can assist in understanding the breadth of covered services.

Comparing benefits between states

Because optional benefits vary, Medicaid coverage differs significantly from state to state. For example, more than 30 states cover adult dental services through Medicaid, but others do not. States also set different rules for how much Medicaid will pay for hospital stays and therapy visits. This variability affects family caregivers and patients. Advocacy groups work to expand Medicaid benefits in more states.

Impact of Medicaid expansion on low-income residents

The Affordable Care Act (ACA) allowed states to expand Medicaid eligibility to more low-income adults starting in 2014. As of January 2024, 39 states, including DC, have adopted the expansion, while 12 states have not. States can adopt expansion via state legislation, ballot initiatives voted on by residents, governors' executive orders, or other means. The federal government pays 90% of the costs of covering the expansion population.

Some expansion states have received federal approval to implement additional restrictions or requirements like premiums, work rules, or healthy behavior incentives on expansion enrollees. Still, the presidential administration has moved to roll back many of these provisions. In expansion states, coverage Start dates ranged from 2014-2023. Late-expanding states like Missouri and Oklahoma faced legal battles before finally implementing them.

States without Medicaid expansion

As of 2023, Kansas, Mississippi, South Carolina, Wisconsin, and Wyoming were still considering expansion legislation but faced objections from their legislatures. Florida and Georgia were not moving forward with full ACA expansion but exploring more limited coverage options and reducing benefits.

Staying informed on Medicaid policies 

Whether states expand Medicaid significantly impacts low-income residents' access to health coverage. Family caregivers should know their state's current Medicaid eligibility levels and any new developments toward potential expansion coverage. Staying informed on these policies can help caregivers understand coverage options for their family member's needs.

Future changes 

Trends like rising healthcare costs shape Medicaid benefits. States could cut optional benefits if budgets grow tight. Federal policies also significantly impact Medicaid programs. Medicaid enrollment will decrease more in the coming year, according to a budget survey of Medicaid officials conducted by KFF and Health Management Associates in partnership with the National Association of Medicaid Directors. 

10 Million Americans disenrolled

Because of the end of the COVID-19 public health emergency policy, over 10 million Medicaid enrollees were disenrolled across the country. The presidential administration's decision left millions without Medicaid coverage, with many losing their coverage for procedural reasons or wrongfully getting canceled without prior notice.

According to The Harris Poll, about 35% of members said their health plan should have contacted them to renew their coverage. State directors have predicted that enrollment will drop by 8.6% in the fiscal year 2024, and spending growth will decrease to 3.4%. After the federal matching funds expire on December 31, the state's share of Medicaid spending will increase by 17.2%. 

Can I re-enroll in Medicaid? 

When someone loses Medicaid coverage due to redeterminations, they can still re-enroll in the program. This is called churn, and it's considered when estimating how many people will be enrolled in Medicaid. If you have a loved one who depends on Medicaid, determine their re-enrollment options, as it could affect their healthcare coverage. 

Medicaid and family caregiving

Family caregivers should stay updated on any changes to secure healthcare access for loved ones. Understanding current mandatory and optional benefits can help caregivers better use Medicaid. Medicaid delivers healthcare access to millions of Americans through required and optional benefits. 

Federal minimum standards provide consistent coverage across states, while flexibility in optional benefits allows customization. By staying informed and taking advantage of available services, caregivers provide the best possible care to their loved ones.