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“Medicaid coverage includes a wide variety of preventive, primary, and acute care services as well as LTSS.³⁸ Not everyone enrolled in Medicaid has coverage for the same set of services. An enrollee’s eligibility pathway determines the available services within a benefit package. Federal law provides two primary benefit packages for state Medicaid programs: (1) traditional benefits and (2) alternative benefit plans (ABPs). Each of these packages is summarized in Table 1. For the medically needy subgroup, states may offer a more restrictive benefit package than is available to other enrollees. States also have statutory options to include other types of coverage that targets specific benefits to targeted groups through certain state plan options. In addition, states can use waiver authority (e.g., SSA Section 1115) to tailor benefit packages to specified Medicaid subgroups as well as offer services outside traditional or ABP coverage, such as LTSS (see “Medicaid Program Waivers” for more information about Section 1115 waivers).

“In general, when Medicaid enrollees have other sources of insurance/payment (including Medicare), Medicaid is the payer of last resort. States can provide Medicaid coverage to individuals whose existing health insurance is limited (sometimes referred to as underinsured). In these cases, Medicaid wraps around that coverage (i.e., additional coverage for services covered under Medicaid but not under the other source of coverage).³⁹“

Source: Alison Mitchell, et al. Medicaid: An Overview. CRS R43357. Congressional Research Service: Washington, DC. Updated April 30, 2025, last accessed February 11, 2026.

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“Traditional Medicaid benefits include primary and acute care as well as LTSS.⁴⁰ The traditional Medicaid program requires states to cover a wide array of mandatory services (e.g., inpatient hospital care, lab and x-ray services, physician care, nursing facility services for individuals aged 21 and older). In addition, states may provide optional services, some of which commonly are covered are personal care services, prescription drugs, clinic services, physical therapy, and prostheses.

“States define the specific features of each covered benefit within four broad federal guidelines:

• “Each service must be sufficient in amount, duration, and scope to reasonably achieve its purpose. States may place appropriate limits on a service based on such criteria as medical necessity.
• “Within a state, services available to the various population groups must be equal in amount, duration, and scope. This requirement is the comparability rule.
• “With certain exceptions, the amount, duration, and scope of benefits must be the same statewide, referred to as the statewideness rule.
• “With certain exceptions, enrollees must have freedom of choice among health care providers.

“The breadth of coverage for a given benefit can, and does, vary from state to state, even for mandatory services. For example, states may place different limits on the amount of inpatient hospital services an enrollee can receive in a year (e.g., up to 15 inpatient days per year in one state versus unlimited inpatient days in another state)—as long as applicable requirements are met regarding sufficiency of amount, duration, and scope; comparability; statewideness; and freedom of choice. Exceptions to state limits may be permitted under circumstances defined by the state.”

Source: Alison Mitchell, et al. Medicaid: An Overview. CRS R43357. Congressional Research Service: Washington, DC. Updated April 30, 2025, last accessed February 11, 2026.

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“As an alternative to providing all the mandatory and selected optional benefits under traditional Medicaid, the Deficit Reduction Act of 2005 (DRA; P.L. 109-171) gave states the option to enroll state-specified groups in what was referred to as benchmark or benchmark-equivalent coverage at the time of enactment but currently are called alternative benefit plans (ABPs).⁴¹ Under ABPs, states must provide comprehensive benefit coverage that is based on a coverage benchmark rather than a list of discrete items and services as under traditional Medicaid.⁴²

“ABPs must qualify as either benchmark or benchmark-equivalent coverage. Under benchmark coverage, ABP benefits are at least equal to one of the statutorily specified benchmark plans (i.e., one of three commercial health insurance products, or a fourth “Secretary-approved” coverage option).⁴³ Under benchmark-equivalent coverage, ABP benefits include certain specified services and the overall benefits are at least actuarially equivalent to one of the statutorily specified benchmark coverage packages.

“Unlike traditional Medicaid benefit coverage, coverage under an ABP must include at least the essential health benefits (EHBs) that most plans in the private health insurance market are required to furnish.⁴⁴ In addition, ABPs must include a variety of specific services, including services under Medicaid’s EPSDT [Early and Periodic Screening, Diagnostic and Treatment] benefit;⁴⁵ family planning services and supplies; and both emergency and nonemergency transportation to and from providers. In general, the EHBs do not include LTSS [Long-Term Services and Supports]. However, states may choose to include LTSS in their ABPs.

“Under ABPs, states are permitted to waive the statewideness and comparability requirements that apply to traditional Medicaid benefits. This flexibility permits the state to define populations that are served and the specific benefit packages that apply.

“States that choose to implement the ACA Medicaid expansion are required to provide ABP coverage to the individuals eligible for Medicaid through the expansion (with exceptions for selected special-needs subgroups). Specific populations are exempt from mandatory enrollment in ABPs (e.g., those with special health care needs such as disabling mental disorders or serious and complex medical conditions). These individuals must be offered the option of a benefit plan that includes traditional Medicaid state plan services, which may include LTSS.”

Source: Alison Mitchell, et al. Medicaid: An Overview. CRS R43357. Congressional Research Service: Washington, DC. Updated April 30, 2025, last accessed February 11, 2026.

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World Health Systems Facts is a project of the Real Reporting Foundation. We provide reliable statistics and other data from authoritative sources regarding health systems and policies in the US and sixteen other nations.

Page last updated February 12, 2026 by Doug McVay, Editor.