Long-Term Care: Are You Eligible for Medicaid?
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The first step in your long-term care planning is probably to answer the question: Are you eligible for Medicaid? To receive federal funding, state Medicaid programs are required to cover certain populations, such as children in low-income families and pregnant women.
Older adults with low incomes and persons with disabilities who receive cash assistance through the Supplemental Security Income program (SSI) are eligible in the states that use SSI criteria. (Eleven states continue to use more restrictive 1972 welfare eligibility standards.)
Eligibility requirements differ considerably from state to state. Some people who are not now eligible for Medicaid may become eligible as the ACA is implemented in those states that have opted to accept the Medicaid expansion program. The Healthcare.gov website gives you some basic information on eligibility requirements in your state.
Unlike Medicare, where there are clear federal eligibility standards, Medicaid varies by state. However, there are certain basic approaches:
According to federal rules, Medicaid must cover certain populations (such as children in low-income families, pregnant women, and people with disabilities receiving SSI).
States set their own, typically stringent, levels for income, often some percentage of the federal poverty level.
States limit the amount of assets a person can retain to be eligible for Medicaid; this is usually a small amount.
Medicaid is intended as a safety net, and states take that goal seriously.
In addition to income and asset limits, 34 state Medicaid programs have medically needy programs that assist people who have high medical expenses but whose income exceeds the maximum threshold for Medicaid eligibility. Older people living in nursing homes and children and adults with disabilities compose nearly half of the 2.8 million people enrolled in these programs.
Eligible participants are allowed to subtract their healthcare expenses from their income. States vary in their rules for eligibility and the way they determine the number of months a person has to pay these expenses privately before Medicaid kicks in. Some of these people may become eligible for Medicaid directly through ACA.
Starting in October 2013, all states were required to have a new Health Insurance Marketplace or exchange. These are websites where various health plans can offer their policies to prospective consumers. The Marketplace offers information about a range of selected private health plans as well as Medicaid. People with certain income levels can receive subsidies, and the goal is to benefit everyone because of the large risk pool.
There have been well-publicized difficulties in the health exchange startup. You may want to ask a family member or friend to help you access the information you need. The ACA also offers funding to local nonprofit organizations, or “navigators,” that may assist individuals with enrollment in the exchange.
As of January 2014, the federal government established new methods of calculating eligibility for health insurance and subsidies under the ACA, including Medicaid. Access to health insurance was expanded to new groups, and the income eligibility level was increased to 138 percent of the Federal Poverty Level (FPL), which varies by the number of people in the household.
There is also a new method of calculating income based on IRS tax records, called MAGI (modified adjusted gross income). People who do not fit these new categories are called non-MAGI applicants. The goal is to have a standard and streamlined process of application and choice of health insurance.
Many states have established navigator assistance sites to help people figure out whether they fit into the MAGI or non-MAGI groups, so check your state Medicaid office for assistance.
Becoming eligible for Medicaid is one challenge; what happens after death can be another. The 1993 federal estate recovery rules require state Medicaid programs to recover from the estate of an individual over the age of 55 certain benefits paid on behalf of a Medicaid enrollee. They might be payments to a nursing home, home- and community-based services, or hospital and prescription drug services.
There are limits, however. States cannot recover money from the estate of a Medicaid enrollee who is survived by a spouse, child under the age of 21, or a disabled child of any age. States vary in how aggressively they pursue estate recovery.
It is important to understand the provisions of your state’s estate-recovery program. Although the amount recovered for the state is usually very small, it can present hardships for the surviving family members.