A little late, but..
I work for CMS, the federal agency that oversees Medicare and Medicaid. I work in the Medicaid area.
Medicaid is a partnership between the federal government and the State government. The state administers the program, and the federal government provides more than half the funds (depending on how poor the State is - in California, the federal share might be 57%; in Mississippi it might be 78%). Because of the federal funds, there are certain rules that the states have to follow.
There are certain services (listed in 1905(a) of the Social Security Act, if I were to go all soulless bureaucrat on you) that can be covered and receive the federal matching care. Now, a state could cover purely cosmetic surgery if they wanted (not reconstructive), but they'd have to pay 100% of it.
My understanding is the WLS is a coverable service - but the state has to decide they want to cover it - it's not manditory. The vast majority of states, at the moment, do not cover it under Medicaid. But they can choose to, if they want, and receive federal funds (though they still have to come up with THEIR part of the funding). But they do have to administer it fairly - they can't cover it sometimes, but not cover it in similar circumstances for someone else (in other words, not exceptions in whatever rules they choose to come up with).
Though there might be a loophole for recipients under the age of 21, but that's another long story and I've probably bored you enough.
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Birthday' 8-28-03
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