MEDICAID & CHIP PRACTICE EXAM
COMPREHENSIVE STUDY GUIDE WITH ANSWERS
AND EXPLANATIONS
1. The creation of Medicaid was authorized by which piece of legislation?
A) Title XXI of the Social Security Act
B) The Affordable Care Act
C) The Children's Health Insurance Program Act
D) Title XIX of the Social Security Act
Answer: D) Title XIX of the Social Security Act
Rationale: Medicaid was established in 1965 under Title XIX of the Social Security Act. Title
XXI, created in 1997, established the Children's Health Insurance Program (CHIP).
2. A key characteristic of Medicaid is that it is a means-tested program. What does this
mean?
A) Benefits are provided only to U.S. citizens.
B) Benefits are provided only to those who meet certain income or asset limits.
C) The program is administered solely by the federal government.
D) Eligibility is automatic for all seniors.
Answer: B) Benefits are provided only to those who meet certain income or asset limits.
Rationale: A means-tested program provides assistance only to individuals or families whose
,financial resources ("means") fall below a specific threshold, answering the question, "Do they
have the means to do without help?"
3. How is Medicaid primarily funded and administered?
A) Solely by the federal government with federal administration.
B) Solely by state governments with state administration.
C) Jointly by federal and state governments, with states administering eligibility and benefits.
D) Through premiums paid by enrollees.
Answer: C) Jointly by federal and state governments, with states administering eligibility
and benefits.
Rationale: Medicaid is a partnership program. The federal government provides a matching
share of funds, while each state is responsible for administering the program, determining
eligibility within federal guidelines, and managing benefits.
4. A major provision of the Affordable Care Act (ACA) regarding Medicaid was to:
A) Transfer all administration to the federal government.
B) Eliminate the Children's Health Insurance Program (CHIP).
C) Expand Medicaid and CHIP eligibility to cover more people.
D) Require all states to implement work requirements.
Answer: C) Expand Medicaid and CHIP eligibility to cover more people.
Rationale: The ACA aimed to increase coverage by expanding Medicaid eligibility to nearly all
,adults with incomes up to 138% of the Federal Poverty Level, though a Supreme Court ruling
made this expansion optional for states.
5. An individual with an income at 50% of the Federal Poverty Level (FPL) would be
considered:
A) Low income but not in poverty.
B) Ineligible for any government assistance.
C) In poverty.
D) Eligible for CHIP but not Medicaid.
Answer: C) In poverty.
Rationale: The Federal Poverty Level (FPL) is a key benchmark. Individuals or families with
incomes below 100% of the FPL are generally considered to be living in poverty.
6. What is the general relationship between the percentage of the Federal Poverty Level
(FPL) and eligibility for Medicaid benefits?
A) As the percentage of FPL increases, eligibility for benefits also increases.
B) As the percentage of FPL increases, eligibility for benefits decreases.
C) There is no relationship between FPL and eligibility.
D) Eligibility is only based on age, not income.
Answer: B) As the percentage of FPL increases, eligibility for benefits decreases.
Rationale: Medicaid is a means-tested program for low-income individuals. As a person's
, income (expressed as a percentage of the FPL) rises, they are less likely to meet the financial
criteria for eligibility.
7. A hospital provides emergency treatment to an uninsured patient who has no way to pay
the bill. This is an example of:
A) Managed care.
B) Dual-eligibility.
C) Uncompensated care.
D) A premium.
Answer: C) Uncompensated care.
Rationale: Uncompensated care refers to healthcare services provided for which there is no
direct source of payment from the patient or an insurer.
8. Compared to private insurance, Medicaid typically provides:
A) Less value at a higher cost.
B) The same value and cost.
C) More value at less cost.
D) Coverage only for emergency services.
Answer: C) More value at less cost.
Rationale: Studies show that Medicaid provides comprehensive coverage to a vulnerable
population, often with lower per-beneficiary costs than private insurance, representing strong
value.
COMPREHENSIVE STUDY GUIDE WITH ANSWERS
AND EXPLANATIONS
1. The creation of Medicaid was authorized by which piece of legislation?
A) Title XXI of the Social Security Act
B) The Affordable Care Act
C) The Children's Health Insurance Program Act
D) Title XIX of the Social Security Act
Answer: D) Title XIX of the Social Security Act
Rationale: Medicaid was established in 1965 under Title XIX of the Social Security Act. Title
XXI, created in 1997, established the Children's Health Insurance Program (CHIP).
2. A key characteristic of Medicaid is that it is a means-tested program. What does this
mean?
A) Benefits are provided only to U.S. citizens.
B) Benefits are provided only to those who meet certain income or asset limits.
C) The program is administered solely by the federal government.
D) Eligibility is automatic for all seniors.
Answer: B) Benefits are provided only to those who meet certain income or asset limits.
Rationale: A means-tested program provides assistance only to individuals or families whose
,financial resources ("means") fall below a specific threshold, answering the question, "Do they
have the means to do without help?"
3. How is Medicaid primarily funded and administered?
A) Solely by the federal government with federal administration.
B) Solely by state governments with state administration.
C) Jointly by federal and state governments, with states administering eligibility and benefits.
D) Through premiums paid by enrollees.
Answer: C) Jointly by federal and state governments, with states administering eligibility
and benefits.
Rationale: Medicaid is a partnership program. The federal government provides a matching
share of funds, while each state is responsible for administering the program, determining
eligibility within federal guidelines, and managing benefits.
4. A major provision of the Affordable Care Act (ACA) regarding Medicaid was to:
A) Transfer all administration to the federal government.
B) Eliminate the Children's Health Insurance Program (CHIP).
C) Expand Medicaid and CHIP eligibility to cover more people.
D) Require all states to implement work requirements.
Answer: C) Expand Medicaid and CHIP eligibility to cover more people.
Rationale: The ACA aimed to increase coverage by expanding Medicaid eligibility to nearly all
,adults with incomes up to 138% of the Federal Poverty Level, though a Supreme Court ruling
made this expansion optional for states.
5. An individual with an income at 50% of the Federal Poverty Level (FPL) would be
considered:
A) Low income but not in poverty.
B) Ineligible for any government assistance.
C) In poverty.
D) Eligible for CHIP but not Medicaid.
Answer: C) In poverty.
Rationale: The Federal Poverty Level (FPL) is a key benchmark. Individuals or families with
incomes below 100% of the FPL are generally considered to be living in poverty.
6. What is the general relationship between the percentage of the Federal Poverty Level
(FPL) and eligibility for Medicaid benefits?
A) As the percentage of FPL increases, eligibility for benefits also increases.
B) As the percentage of FPL increases, eligibility for benefits decreases.
C) There is no relationship between FPL and eligibility.
D) Eligibility is only based on age, not income.
Answer: B) As the percentage of FPL increases, eligibility for benefits decreases.
Rationale: Medicaid is a means-tested program for low-income individuals. As a person's
, income (expressed as a percentage of the FPL) rises, they are less likely to meet the financial
criteria for eligibility.
7. A hospital provides emergency treatment to an uninsured patient who has no way to pay
the bill. This is an example of:
A) Managed care.
B) Dual-eligibility.
C) Uncompensated care.
D) A premium.
Answer: C) Uncompensated care.
Rationale: Uncompensated care refers to healthcare services provided for which there is no
direct source of payment from the patient or an insurer.
8. Compared to private insurance, Medicaid typically provides:
A) Less value at a higher cost.
B) The same value and cost.
C) More value at less cost.
D) Coverage only for emergency services.
Answer: C) More value at less cost.
Rationale: Studies show that Medicaid provides comprehensive coverage to a vulnerable
population, often with lower per-beneficiary costs than private insurance, representing strong
value.
