Medicaid is a means-tested federal-state matching program that provides medical assistance for persons who are unable to afford needed medical and health-related services. Since the program''s establishment in 1965, it has become the largest single source of financing- both private and public- for long-term care for those elderly and disabled who are low-income or who have depleted their income and assets on medical and long-term care expenses. In order to be eligible for Medicaid, individuals must meet certain eligibility criteria. These criteria are determined by broad federal requirements and state decisions about whom they want to cover under their Medicaid programs. The financial eligibility standards that states do use are shaped in large part by estimates of spending that will occur with these standards. The elderly and disabled are the most expensive groups that are covered under Medicaid, largely because Medicaid covers nursing home and other institutional long-term care and because this care is expensive. Medicaid eligibility rules also result in a diverse disabled population receiving coverage. Many disabled persons become eligible because they cannot work and are dependent on welfare assistance from SSI. However, Medicaid provides incentives for other disabled persons to work and retain Medicaid coverage. The disabled population also includes children who need a broad range of home and community based care as well as some who need nursing home care.