Medicaid is a government sponsored insurance for people who don't have the income to be able to afford insurance on their own. The Medicaid program is funded by each state, with funds also coming from the federal government. Each state has its own plan, and in most states each county is responsible for processing the Medicaid applications and updating the statewide system. Many physicians won't accept Medicaid patients because reimbursements are usually very low, so in some states Medicaid is shipped out to insurance companies to set up managed care plans that help to give patients more options for coverage.

Since Medicaid is for low income families or others who may have trouble paying health claims, there are rules and problems as it pertains to trying to collect payment if the registration process fails for some reason. In some states, accepting a patient as a Medicaid patient means you will accept the rules of your particular state. If a patient's Medicaid hasn't been verified while they're still in the facility, or in the doctor's office, if it turns out later that Medicaid coverage wasn't in effect, the medical entity is not allowed to bill the patient for the balance. Also, some states have co-pay amounts for some Medicaid services, which medical entities are supposed to attempt to collect while the patient is still on their premises. If they don't, then a patient is not supposed to receive a bill on the back end. If they do, they don't have to pay. If a patient is asked for their co-pay and states they cannot pay, in some states that's enough to make the hospital have to adjust off the balance.

There is also something known as "spend down" in most states. This is for families that don't fully fit the qualifications of Medicaid, so they have to spend a predetermined amount out of their own funds before Medicaid is considered for coverage. In this instance, medical entities are allowed to send a self pay bill to the patient, and can even follow collection procedures until this amount has been paid, since a patient isn't considered a Medicaid patient until this payment has been resolved.

Medicaid, as an insurance, doesn't transfer well between states. Hospitals have only two choices when trying to obtain payment from Medicaid in other states. The first is to enroll in another state's Medicaid program, which can be problematic and cost more money than it's worth. The other is to hook up with specific companies whose business is billing Medicaid in other states, which is a good thing to do for those potential high balances from insurance claims. Medical facilities can try to bill a patient, but for most small balances they are probably wasting their time; private physicians probably won't see these patients.

Medicaid will often cover patients that no other insurance will cover. If there's ever any question as to whether there might be some financial assistance, contact the closest Department of Social Services for your area.