Medicaid provides medical benefits for the poor and indigent. It is funded as follows:

Medicaid is a program designed to provide healthcare coverage for low-income individuals and families, often referred to as the poor and indigent. The correct answer highlights the unique funding structure of Medicaid, which is a joint effort between the federal and state governments.

Federal funding plays a significant role in supporting Medicaid, as the federal government matches a portion of the expenditures made by each state, thus encouraging states to participate and expand their Medicaid programs. The amount of federal funding provided varies from state to state based on various factors, including the state's annual income levels and the overall design of its Medicaid program.

The collaboration between state and federal governments allows for flexibility and the ability for states to tailor their Medicaid programs to meet the needs of their populations while still adhering to certain federal guidelines. This joint funding structure is essential in ensuring that resources are available for the healthcare services necessary for vulnerable populations.

In contrast, the other options do not accurately reflect the funding mechanism of Medicaid. Employer taxes based on payroll and payroll taxes from the employed pertain more to other federal programs such as Social Security or Medicare. While Medicare is related in context and is also funded by payroll taxes, it is a separate program distinct from Medicaid, which specifically serves low-income individuals.