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Unlike Medicare, Medicaid is not a purely federally-funded program. Every state has a Medicaid budget, which the federal government 'matches' based upon a formula, despite the fact that Medicaid is considered an entitlement, implying that enrollees are entitled to benefits regardless of where they live. Because federal funding is 'matched' that means that states that spend more on Medicaid -- usually wealthier states -- tend to receive more federal funds (Villarreal 2006). The reason for the 'matched' funding is partially due to the highly variable costs of living from state to state -- it is far more expensive to reside in New York City than Wyoming, for example -- and also to honor the principles of federalism, allowing the states to determine additional categories eligible for care. Although states must provide Medicaid for persons with income below a certain level, they do have a great deal of discretion in covering additional groups of persons.
For example, because of the increased financial demands put upon states as a result of the recession, many states are considering charging more for optional benefits, such as prescription drugs, dental services and speech therapy or for routine services given to non-pregnant, non-disabled...
These categories meet criteria for eligibility in some states, but not in others. Federal guidelines do not require states to offer these services or to serve these categories of individuals.
References
Luhby, Tami. (200). Medicaid busts state budgets.
CNN.com. Retrieved June 24, 2011 at http://money.cnn.com/2011/02/28/news/economy/medicaid_funding_states/index.htm
Medicare and Medicaid: What is the difference? (2011). Nolo. Retrieved June 24, 2011
http://www.nolo.com/legal-encyclopedia/medicare-medicaid-whats-difference-29615.html;jsessionid=09B9A52B25441850836A7D347AE6955A
https://questions.medicare.gov/app/answers/detail/a_id/2038/~/what-is-the-difference-between-medicare-and-medicaid%3F
http://www.medicare.gov/Publications/Pubs/pdf/11306.pdf
http://www.ncpa.org/pub/ba566/
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