WASHINGTON - The Obama administration is setting new standards for Medicaid private insurance plans, now the main source of coverage for millions of low-income people.

The rules issued Monday address insurers operating as Medicaid middlemen in 39 states. Each state runs its own program, although the federal government pays most of the cost.

The rules specify that insurance companies must guarantee access to certain types of service providers, and that at least 80 percent of what insurers get paid must be spent on medical care. They also envision a quality rating system to help Medicaid recipients pick a plan.

Medicaid covers more than 70 million people, from pregnant women and children, to elderly nursing home residents. It costs about $500 billion a year, making it a major component of state budgets.