ABSTRACT
The medicaid program provides medical services to low-income persons, particularly the aged, blind, disabled, and members of families with dependent children. Medicaid costs are shared by the federal and state governments; the federal government finances approximately 56 percent of total medicaid benefits. States are allowed wide discretion in determining eligiblity for medicaid. States may also provide medicaid coverage to the "medically needy." Medicaid is an appropriated entitlement. Individuals who meet the eligibility criteria are entitled to benefits under the law. The reconciliation act achieved savings in federal medicaid expenditures in two ways. First, it reduced the proportion of total program costs financed by the federal government. Second, it increased state discretion in the medicaid program, thereby reducing total program costs. State discretion over the medicaid program was increased by provisions of the reconciliation act that limited the "freedom of choice" of program participants. The reconciliation act made a series of small changes in provisions relating both to medicaid and medicare.
