Medicaid, MEHD uh kayd, is a United States government program that works in cooperation with state governments to partly finance medical assistance to needy people. Individual state governments administer their own state Medicaid programs, and the federal government pays a portion of the states' costs. Within broad federal guidelines, states have considerable freedom to define who is eligible for Medicaid and what categories of medical services are covered. However, all state programs must meet certain basic standards in order to receive federal funding.