In Missouri, not only is a home birth not covered by Medicaid, if Medicaid discovers you're perusing a home birth, or you have one, they will drop you and not cover anything for you or the baby. How messed up is that?!?! I guess the silver lining is that it will cover a birth center birth with midwives. That's why I ended up opting for a hospital birth-the idea of making arrangements to go to and from the BC and coordinate 4 kids and all the logistics was just too much for me.
That's really messed up. In Texas, where we will be having our baby, I guess Medicaid recently changed it's policy to cover home birth and birth center births. But the amount they will pay to the midwife is so absurdly low (like $800) that most midwives and birth centers can't accept it, so they effectively don't cover it. And Medicaid doesn't allow the mother to supplement the midwife fees with her own (or fundraised) income. But fortunately they don't have this ridiculous policy you say they have in Missouri of dropping you if you are planning a home birth. So women on Medicaid can do community fundraising or pay out of pocket to cover midwife fees and then rely on their Medicaid in the case of a hospital transfer and to cover some minor things like lab work.
The good thing is that it sounds like in Texas, there are a lot of activist midwifes doing what they can to change the Medicaid policies. The whole situation is so ridiculous considering it is so much cheaper for them to just cover home births instead of paying for hospital births.