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Adam Farren

Medicaid is the U.S. health care program for people with limited resources, and it serves low income parents, children, people with disabilities, and low income seniors. It is jointly funded by the states and the federal government and managed by the states. Medicaid is distinctly different from Medicare, which is an entitlement program funded entirely at the federal level and provides health insurance to people aged 65 and older. Medicaid is not an entitlement program, but is instead a needs-based social welfare program in which eligibility is determined by income. It covers a wider range of health services than Medicare and is funded by states as well as the federal government. It is possible to be eligible for both Medicaid and Medicare, and approximately 8.8 million Americans are enrolled in both programs.^[1]

The Pharmaceutical Industry depends on Medicare and Medicaid funding for a significant percentage of its revenues. Of the two, however, Medicare's impact on the business of Health Care in America is much greater. The senior citizens of all income levels served by Medicare make up the major target population for most of the pharma industry's drugs. This is not the case for the low income, younger patients enrolled in Medicaid. Certain drugs and treatments, however, do have their revenues tied closely to Medicaid spending - notably HIV and AIDS, where more than half of people living with AIDS are estimated to receive Medicaid payments.

1. ↑ http://www.kff.org/medicaid/upload/7895-2.pdf