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reimbursement of substance abuse treatment or prevention services under Medicaid, nor are 

 states required to offer such benefits (thougli some states offer limited services). 



Substance abuse is not a problem only for Medicaid recipients, nor are they necessarily the most 

 costly population in this regard. Smoking, alcohol and drug abuse are equal opportunity 

 problems affecting aU segments of our society regardless of income, race or social status. 

 Indeed, the techniques we have developed to analyze Medicaid costs through medical and 

 epidemiologic evidence forms the foundation for our broader study of the relationship between 

 substance abuse and morbidity across all populations and all payers. 



Background 



Enacted in 1965, Medicaid was intended to take care of the medical needs of low-income 

 individuals who were either part of families with dependent children, permanently and totally 

 disabled, or elderly. The program is not only directed at the acute care needs of this population, 

 but also finances long-term care for the needy elderly and chronically ill. 



Unlike Medicare, which is considered social insurance and funded through a combination of 

 payroll taxes, premiums, and general Federal revenues, Medicaid is a welfare program, with 

 eligibility linked to the Aid to Families with Dependent Children (AFDC) and Supplemental 

 Security Income (SSI) programs, and is funded through general revenues generated by the states 

 and Federal government. 



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