Medical Assistance Program

To provide financial assistance to States for payments of medical assistance on behalf of cash assistance recipients, children, pregnant women, and the aged who meet income and resource requirements, and other categorically-eligible groups.

In certain States that elect to provide such coverage,
medically-needy persons, who, except for income and resources, would be eligible for cash assistance, may be eligible for medical assistance payments under this program.

Financial assistance is provided to States to pay for Medicare premiums, copayments and deductibles of qualified Medicare beneficiaries meeting certain income requirements.

More limited financial assistance is available for certain Medicare beneficiaries with higher incomes.

Agency - Department of Health and Human Services

The Department of Health and Human Services is the Federal government's principal agency for protecting the health of all Americans and providing essential human services, especially to those who are least able to help themselves.

Office - Contact the Associate Regional Administrator, Division of Medicaid, Centers for Medicare and Medicaid Services.

(See Appendix IV of the Catalog for addresses and telephone numbers.).

Program Accomplishments

The number of Medicaid enrollees in fiscal year 2007 was 49,100,000. It is estimated that there will be 50,000,000 Medicaid enrollees in fiscal year 2008 and an estimated 50,800,000 Medicaid enrollees in fiscal year 2009.

Uses and Use Restrictions

For the categorically needy, States must provide in-and-out patient hospital services; rural health clinic services; federally-qualified health center services; other laboratory and x-ray services; nursing facility services, home health services for persons over age 21; family planning services; physicians' services; early and periodic screening, diagnosis, and treatment for individuals under age 21; pediatric or family nurse practitioner services; and services furnished by a nurse-midwife as licensed by the States.

For the medically needy, States are required to provide a minimum mix of services for which Federal financial participation is available (see section 1902(a)(10)(C)(iv) of the Social Security Act).

Eligibility Requirements

Applicant Eligibility

State and local welfare agencies must operate under an HHS-approved Medicaid State Plan and comply with all Federal regulations governing aid and medical assistance to the needy.

Beneficiary Eligibility

Low-income persons who are over age 65, blind or disabled, members of families with dependent children, low- income children and pregnant women, certain Medicare beneficiaries and, in many States, medically-needy individuals may apply to a State or local welfare agency for medical assistance. Eligibility is determined by the State in accordance with Federal regulations.


Federal funds must go to a designated State Medicaid Agency. Individuals must meet State requirements. Administrative costs will be determined in accordance with OMB Circular No. A-87, "Cost Principles for State and Local Governments."

Aplication and Award Process

Preapplication Coordination

The standard application forms, as furnished by HHS and required by OMB Circular No.

A-102, "Uniform Administrative Requirements for Grants-in-Aid to State and Local Governments," must be used for this program.

States should contact the HHS Regional Office for application information.

(See Appendix IV of the Catalog for agency Regional Office addresses.) This program is excluded from coverage under E.O.


Application Procedures

Individuals needing medical assistance should apply directly to the State or local welfare agency. States should contact the Regional Administrator, CMS for application forms. (See Appendix IV of the Catalog for agency Regional Office addresses.) This program is excluded from coverage under OMB Circular No. A-110.

Award Procedures

States are awarded funds quarterly based on their estimates of funds needed to provide medical assistance to the needy. Awards are made quarterly on a fiscal year basis as follows: October 1, January 1, April 1, and July 1. Individuals receive medical care from providers of medical care who are participating in the Medicaid program.


An individual needing medical assistance may apply to the State at any time. States must submit quarterly estimates of funds needed no later than August 15, November 15, February 15, and May 15, in order to receive a timely quarterly grant award for the following quarter.


Social Security Act, Title XIX, as amended; Public Laws 89-97, 90-248, and 91-56; 42 U.S.C. 1396 et seq., as amended; Public Law 92-223; Public Law 92-603; Public Law 93-66; Public Law 93-233; Public Law 96-499; Public Law 97-35; Public Law 97-248; Public Law 98-369; Public Law 99-272; Public Law 99-509; Public Law 100-93; Public Law 100-202; Public Law 100-203; Public Law 100-360; Public Law 100-436; Public Law 100-485; Public Law 100-647; Public Law 101-166; Public Law 101-234; Public Law 101-239; Public Law 101-508; Public Law 101-517; Public Law 102-234; Public Law 102-170; Public Law 102-394; Public Law 103-66; Public Law 103-112; Public Law 103-333; Public Law 104-91; Public Law 104-191; Public Law 104-193; Public Law 104-208,104-134; Balanced Budget Act of 1997, Public Law 105-33; Public Law 106-113; Public Law 106-554; Public Law 108-27; Public Law 108-173; Public Law 109-91; Public Law 109-171; Public Law 109-432; Public Law 110-28; Public Law 110-161.

Range of Approval/Disapproval Time

Up to 60 days. The States usually provide needy individuals with immediate medical assistance.


Individuals denied medical assistance by the State or local welfare agency must be given a fair hearing on appeal (see 42 CFR, Subchapter C, Part 431, Subpart E). States have 60 days to resubmit revised applications.


Recipients receive assistance as long as they are qualified under State requirements.

Assistance Considerations

Formula and Matching Requirements

Federal funds are available to match State expenditures for medical care. Under the Act, the Federal share for medical services may range from 50 percent to 83 percent. The statistical factors used for fund allocation are: (1) Medical assistance expenditures by State; and (2) per capita income by State based on a 3-year average (source, "Personal Income," Department of Commerce, Bureau of Economic Analysis). Statistical factors for eligibility do not apply to this program. This program has maintenance of effort (MOE) requirements, see funding agency for further details.

Length and Time Phasing of Assistance

The needy receive medical assistance as necessary. States receive funds quarterly. The Electronic Transfer System will be used by States for monthly cash draws on the Federal Reserve Bank.

Post Assistance Requirements


States must submit fiscal and statistical reports, as required, to the Centers for Medicare and Medicaid Services, Department of Health and Human Services.

A Treasury Report TUS-5401 is required monthly.

States must submit certified expenditure reports within 30 days after the end of each quarter.


In accordance with the provisions of OMB Circular No. A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Nonprofit Organizations," nonfederal entities that expend financial assistance of $500,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular No. A-133.


States must maintain records which substantiate direct and indirect costs charged to the grant award activity.

Financial Information

Account Identification



(Grants) FY 07 $203,499,801,000; FY 08 est $204,052,706,000; and FY 09 est $217,537,328,000.

Range and Average of Financial Assistance

$4,851,000 to $26,241,144,000; $3,643,798,321.

Regulations, Guidelines, and Literature

42 CFR, Subchapter C.

Information Contacts

Regional or Local Office

Contact the Associate Regional Administrator, Division of Medicaid, Centers for Medicare and Medicaid Services. (See Appendix IV of the Catalog for addresses and telephone numbers.).

Headquarters Office

Center for Medicaid and State Operations, Centers for Medicare and Medicaid Services, Room C4-25-02, 7500 Security Boulevard, Baltimore, MD 21244. Telephone: (410) 786-3870. Use the same number for FTS.

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