Health Insurance

What Is Medicaid and Who Qualifies for It?

Medicaid is a state and government program designed to provide the elderly, the disabled, pregnant women, and low-income families with health insurance. To qualify for Medicaid, the recipient must be below the national poverty line or enrolled in other governmental programs, like Social Security, foster care, or Medicare.

Medicaid Eligibility

Medicaid, like other governmental programs, can be incredibly complex for those not used to navigating programs to find the benefits or how to apply. However, this program is an excellent resource for the elderly, those with low income, those with disabilities, and those pregnant while living below the poverty line. Read below for details about what Medicaid covers, how to qualify, and how to appeal if an application is denied.

What is Medicaid?

Medicaid is a federally controlled, state-administered program that provides low-income adults, children, pregnant women, elderly adults, and those with disabilities with affordable health insurance. Those that qualify for Medicare may also carry Medicaid coverage if they meet the income guidelines. Medicaid offers benefits to its recipients that Original Medicare doesn’t cover. Medicare is jointly funded by the US Government and also by each state. Each state is allowed to decide who qualifies and who doesn’t. Because of this, the state requirements and eligibility for Medicaid vary from state to state.

Because Medicaid is for those with extensive medical needs, limited financial resources, or both, Medicaid doesn’t carry any premiums or deductibles. Some states carry share-of-cost requirements that vary based on the recipient’s income. 

What does Medicaid Cover?

Because Medicaid is a federally funded program, the Government requires that they cover inpatient and outpatient hospital care and physician care, x-ray and laboratory services, nursing facility services, home health services, and other mandatory care services. The Government also requires states to cover Early and Periodic Screening, Diagnostic, and Treatment benefits for individuals under the age of 21. Medicaid also covers:

  • Rural Health Services
  • Family Planning services
  • Freestanding birth center services, as long as the state licenses the facility
  • Transportation to medical care
  • Tobacco cessation counseling for pregnant women

States provide optional coverage for hearing aids, dental care, vision services, case management, physical therapy, and occupational therapy. Medicaid also covers hospice, personal care services for individuals with disabilities, and coverage for seniors prone to bone breaks and other low-impact injuries. All states cover prescription drugs under Medicaid.

What Is Not Covered By Medicaid?

Services not covered by Medicaid vary from state to state, but in general, Medicaid won’t cover:

  • Single-use disposables like bandages or adult diapers
  • Private nursing services or caregiving services
  • Cosmetic and elective services
  • Any treatment that isn’t FDA-approved or any treatment plan designated as an alternative treatment plan.
  • Medical care received outside of the United States (unless an exception is obtained beforehand)
  • Comfort items (such as beauty supplies or televisions)

Who Is Eligible For Medicaid?

Because each state sets its own requirements, Medicaid eligibility varies from state to state, but each state uses the following general guidelines to determine who qualifies for the program:

Financial Eligibility

The Affordable Care Act changed the process of financial eligibility by checking a person’s Modified Adjusted Gross Income to see if they qualify for programs like Medicaid, CHIP, cost-share reductions available through the marketplace, and tax credits. MAGI looks at all of your income after factoring in certain tax deductions.

This method is unique because it measures each American’s finances on the same scale, regardless of their state. The states can then use that scale to decide who qualifies for the program and who doesn’t in a way that’s more uniform across the board.

In general, however, pregnant women and elderly individuals that are 133% under the federal poverty line qualify for the program. Medicaid also has strict asset rules that a person must stay below to qualify for the program, typically $2000 per person and $4000 per couple. Countable assets include: 

  • Revocable trusts 
  • Cash and bank accounts 
  • Life insurance policies with a cash value
  • Investments, certain annuities 
  • Secondary homes or vehicles

Exempt assets include:

  • Retirement accounts
  • Personal property
  • A primary home up to a fixed value
  • A primary vehicle
  • Household items 

Non-Financial Eligibility

To qualify with non-financial eligibility, a person must be a resident of the state they’re applying in and must be either a United States citizen or a non-citizen with a Visa. Those individuals living with a disability, blindness, or over the age of 65 are exempt from financial eligibility limitations exempting them from the program.

Also, anyone who collects Social Security Income (SSI) is automatically eligible for this program. Children with an adoption assistance agreement under title IV-E of the social security act are also automatically qualified for the program. 

Spend Down

An individual must do this if they make too much money or have too much money in assets to qualify for Medicaid outright. For example, if a person makes $300 above the requirement to qualify for Medicaid, they would have to pay the first $300 worth of medical bills, and then Medicaid would pay to cover the rest.

How to Apply For Medicaid

Qualifying for Medicaid varies from state to state. The two basic ways to apply for Medicaid or CHIP coverage is to contact a state Medicaid agency to apply through them or to fill out an application through the Health Insurance Marketplace and wait for a Medicaid or CHIP representative to contact them.

The qualification process covers things like establishing Medicaid eligibility, discussing coverage and services, discussing liens and third-party liability coverage, discussing provider enrollment rules and Medicaid claims, how to report a lost Medicaid card and request a replacement, finding a Medicaid or CHIP provider, and checking the status of a Medicaid or CHIP application.

Appealing Medicaid Denials

If Medicaid denies an application for the program, they must send the applicant a denial notice. That notice would come in the mail within 90 days if the applicant applied for Medicaid for a disability and 45 days if the applicant applied for the program on another basis. The specifics on making a formal appeal will also be written on the notice, so applicants must read the rejection carefully if they receive one.

In general, a rejected applicant will be required to attend a hearing to appeal the decision in front of a judge. If an applicant loses the first appeal, they may be able to file for a second appeal, the rules of which depend on the state. If an applicant wins their appeal, the effective date of the coverage will begin retroactively back to when the applicant first qualified.