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Unlike Medicare, which is a federally mandated entitlement program that requires uniformity of services throughout all states, Medicaid is a needs-based social welfare program that is administered by both the federal and state governments. Thus, because state governments exert control of the Medicaid programs within their states, differences in the benefits, services and rules for eligibility will vary from state to state.

How is Medicaid Administered by Both the Federal and State Governments?

Medicaid programs are funded by both the federal and state governments yet are managed by the states. Federal funding for state-run Medicaid programs is in the form of matching funds, which may provide as much as fifty percent of the total funding for the Medicaid benefits and services in a state. However, the amount of funding each state provides is different.

What Are Some of the Differences Between State-run Medicaid Services?

State participation in the Medicaid program is voluntary and each state may structure its Medicaid program differently. For example, some states may choose to pay health service providers directly or to use private health insurance companies to administer payments for them. Or, Medicaid benefits and services may be administered by health maintenance organizations (HMOs) that determine eligibility of enrollees for the state.

State Eligibility Rules for Medicaid Benefits and Services

Through the Centers for Medicare and Medicaid Services (CMS), the federal government establishes the general rules for determining eligibility for Medicaid. Although states must follow the federal guidelines for eligibility, each state is allowed to adjust the rules of eligibility for its Medicaid program. Thus, eligibility rules for each state will differ. In some cases, applicants may be denied coverage in a state-run Medicare program.