Medicaid (Grants to States for Medical Assistance)

Title XIX of the Social Security Act established Medicaid, a federal-state medical assistance program. Medicaid has emerged as a primary source of funding for services to individuals with severe disabilities.

Eligibility for Medicaid is based on financial need. Persons with disabilities may be eligible if they meet these general criteria:

  • Are categorically needy. States must cover all persons receiving cash benefits under Aid to Families with Dependent Children; and, either all persons who receive Supplemental Security Income or persons who meet more restrictive requirements set by the state.
  • Are medically needy. States may elect to cover individuals whose incomes are higher than SSI or AFDC minimums, but who cannot afford needed medical treatment and care.
  • Are qualified severely impaired individuals. Certain individuals under age 65 who receive SSI payments based on blindness or disability are also eligible for Medicaid. Generally, such persons are capable of gainful employment but do not earn enough for a reasonable standard of living.

Federal payments are available to match state expenditures for covered forms of medical care; the federal share ranges from 50% to 83% of reimbursable costs.

States must provide certain required services and are permitted to offer optional services. Overall, Medicaid offers each participating state broad flexibility in its medical assistance program, so programs differ markedly from state to state. Some of the programs available under Medicaid are:

  • Intermediate Care Facilities for the Mentally Retarded. To provide health and rehab services for those who are mentally retarded and require "active treatment" services in a comprehensive, facility-based setting.
  • Home and Community-Based Waiver Services. To waive certain federal requirements so states can offer services to individuals who, without those services, would require institutional care.
  • Psychiatric Care for Children & Older Individuals. Provides reimbursement to states for inpatient psychiatric services for persons under 21 years of age. For older people, states may elect to include persons over age 65 in institutions for mental disorders in their Medicaid program.
  • Nursing Facility Services. Requires all states participating in Medicaid to screen out nursing facility applicants with mental illness, mental retardation, or related conditions who cannot be served appropriately in a nursing facility.
  • Community Supported Living Arrangements Services. Established the state option for "community supported living arrangements" services for persons with mental retardation and related conditions.


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