In this article, we will go over the difference between Direct Medicaid ("fee-for-service") and Managed Medicaid coverage. We will also cover what Medicare is and who qualifies. Understanding the differences between these insurance plans will help you navigate your benefits with confidence and ease.
What is Medicaid?
Medicaid or Medicaid Fee-For-Service is run by the federal and state governments to provide healthcare to low-income families and individuals, including children, elderly adults, and people with disabilities. The federal government sets the standards for Medicaid, but eligibility and coverage vary by state.
Each state has its own Medicaid program, all under different names such as Medi-Cal, MedQuest, TennCare, etc.
What is Managed Medicaid?
Medicaid Managed Care Organizations, aka "Medicaid MCOs" or "Managed Medicaid," are healthcare plans offered by private companies that are approved by each state's Medicaid program. 41 states currently use MCOs, and 10 do not.
| The Plan Type | Medicaid or Medicaid Fee-For-Service | Medicaid MCO |
| Who is it for? | Low-Income families/ individuals | |
| Who offers it? | State government | Offered by private companies approved by each state's Medicaid program. |
| Who bills? | The state program | The private payer |
Currently, patients with Medicaid who are in-network with Rula can only see therapy providers.
Do I have Direct Medicaid or Managed Medicaid Plan? How do I choose the right plan with Rula?
Your health insurance plan card will look different if you have a direct medicaid vs. managed medicaid plan. Each state’s Direct Medicaid “Benefits Identification Card” (BIC) looks different. Below are typical features that can be found across each BIC vs. a managed care card.
| Direct Medicaid Card | Managed Medicaid Card | |
| Issuer | Issued by the state (e.g. DHCS in CA) | Issued by your managed care plan (private payer, e.g. Kaiser Permanente Southern California) |
| Branding | State’s design (e.g. poppy flower in CA); no HMO branding or plan logos | Plan-specific logo and colors |
| Typical Information Included | Name, DOB, recipient ID, issue date | Member ID, group number, PCP, hotline |
| Card design | Typically more minimalist | Typically more detailed |
| Visual example (for CA - these vary by state) |
What is Medicare?
"Traditional" or "fee-for-service" Medicare is provided directly by the government to recipients. With Traditional Medicare, patients can go to any doctor who accepts Medicare. As it's a federally run program, benefits are standardized nationally.
Medicare Advantage is government-funded but managed by private insurance companies – the primary difference to traditional Medicare. These plans have to offer the same coverage as Traditional Medicare plans, but are allowed to offer additional benefits – so benefits coverage may vary by plan. With Medicare Advantage, patients may have to use doctors in their network, without the need for a network or referral.
You can learn more about Medicare and Medicare Advantage in this help center article.
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