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All About Medicaid

Summary

What Is Medicaid and How Does It Work?
Medicaid is a public health plan that provides coverage for millions of Americans. It’s a program that was set up by the federal government and is run by individual states.

Whom and What Does Medicaid Cover?
Often, you need to have low earnings to get Medicaid. The earning limit is based on your modified adjusted gross income. But the limits differ between states. If you have supplemental security income, you may also qualify for Medicaid.
Outside of income limits, there are other rules for Medicaid. You need to live in the state where you get Medicaid. You also must be a US citizen or a qualified non-citizen.
States differ in what they cover under Medicaid. Some benefits are mandated by the federal government, meaning states have to include them. Other benefits are optional, meaning states can choose whether to offer them or not.

Long-Term Care and Dual Eligibility for Medicaid and Medicare
Medicaid covers long-term care. But there are often rules about your health needs and your earnings. However, many states allow people with major health issues who earn too much to still get Medicaid.
It’s possible to get both Medicare and Medicaid coverage. This can happen if you’re 65 or older and have low earnings and assets. It can also happen if you qualify for both another way.

How to Sign Up for Medicaid
You can apply for Medicaid through your state agency. Or you can apply through the Health Insurance Marketplace.

This article will tell you what Medicaid is and how it works. It will also tell you whom and what Medicaid covers, including long-term care, and how to sign up for it. Finally, it will tell you about dual eligibility for adults 65 and older who qualify for both Medicare and Medicaid. This article doesn’t provide legal or financial advice. Consider speaking to a financial advisor or lawyer if you have questions about your specific situation.

What Is Medicaid?

Medicaid is a public health plan that provides coverage for millions of Americans. It’s designed to cover people with low income. Anyone with low earnings could be eligible for Medicaid. That includes adults, children, pregnant women, older adults and people with disabilities.

How Does Medicaid Work?

Medicaid is a program that was set up by the federal government and is run by individual states. The federal government requires Medicaid programs to provide basic healthcare coverage. But each state is free to choose to add to that coverage. That means that Medicaid coverage is often different in different states. All 50 states plus Washington, DC, and the US territories have Medicaid programs. They are funded by both the states and the federal government. Some Medicaid programs pay your doctor directly for your care. Others work with private health plans. When Medicaid works with a private health plan, this is called a Medicaid Managed Care plan.

Children’s Health Insurance Program (CHIP). Like Medicaid, CHIP is run by individual states. And both are part of the federal agency known as the Centers for Medicare & Medicaid Services (CMS). Some states combine Medicaid and CHIP programs. But CHIP only covers children’s healthcare for eligible children. A family that earns too much to get Medicaid but not enough to buy private healthcare can get CHIP. Find out more about CHIP here.

Whom Does Medicaid Cover?

Each state has a different Medicaid program and different eligibility rules. That means you’ll need to get in touch with your state’s Medicaid agency to find out if you can get Medicaid coverage.

Often, you need to have low earnings to get Medicaid. The earning limit is based on your modified adjusted gross income (MAGI). But the limits differ between states.

Supplemental security income (SSI) is monthly payments from the government. SSI is for people who have low earnings and are disabled or aged 65 or older. If you have SSI, you may also qualify for Medicaid. In many states you’re automatically enrolled. But in some states, you need to apply. Find out more about disability benefits in our article Benefits for People with Disabilities.

Some state Medicaid programs won’t cover you at all in certain circumstances. Examples include if you’re an adult younger than 65 or you don’t have a disability. Another example is if you’re an adult who doesn’t have children in your house. But some states have expanded their Medicaid programs. That can mean they’ll cover you if your earnings are low enough, no matter what. You can find out whether your state has expanded Medicaid benefits here.

Outside of income limits, there are other rules for Medicaid. You need to live in the state where you get Medicaid. You also must be a US citizen or a qualified non-citizen. Children or young adults in foster care are covered by Medicaid in all states. They’re often covered after they leave foster care too, up to age 26. Find out more about Medicaid eligibility here.

What Does Medicaid Cover?

States differ in what they cover under Medicaid. Some benefits are mandated by the federal government, meaning states have to include them. Other benefits are optional, meaning states can choose whether to offer them or not.

Mandatory benefits. Medicaid in each state must cover the same basic healthcare services for eligible people. Those services include:

Transportation to medical care;
Inpatient and outpatient hospital services;
Rural health clinic services;
Federally qualified health center services;
Lab and X-ray services;
Nursing facility services;
Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services;
Family planning services;
Tobacco cessation counseling for pregnant women;
Physician services;
Home health services;
Nurse midwife services;
Certified pediatric and family nurse practitioner services;
Freestanding birth center services when licensed or otherwise recognized by the state;
Medication Assisted Treatment (MAT);
Routine patient costs of items and services for beneficiaries enrolled in qualifying clinical trials; and
Concurrent care for children receiving end-of-life care.

Optional benefits. All states offer prescription drug benefits, even though it’s not a mandatory Medicaid benefit. Some state Medicaid programs choose to offer other benefits too. These can include dental services; physical and occupational therapy; eyeglasses; and speech, hearing and language disorder services, among others. Check with your state’s Medicaid agency to find out what they cover.

Medicaid and Long-Term Care: How to Qualify Without Low Earnings

You might need long-term care if you have a serious disability and/or are in very poor health. Long-term care includes home-based, community and residential care. Medicaid covers long-term care. But there are often rules about your health needs and your earnings.

Medically needy pathway. Many states allow people with major health issues who earn too much to still get Medicaid. This is typically called a medically needy pathway or a spend-down program. You can become eligible for Medicaid when you spend down the amount of your earnings or assets that’s above the limit. You must spend down the extra money on medical services or remedial care services. That can include long-term care services.

Non-MAGI pathways. There are some other cases when Medicaid will cover long-term care, even if you don’t have a low income. These are called non-MAGI pathways and they are offered in most states:

Katie Beckett coverage applies to disabled people under age 20 who need institutional care. Institutional care means round-the-clock total care. That includes room and board if you’re in an institution. You can get institutional-level care at a residential facility or at home. Only the child/young adult’s income and assets count toward the income limit for Medicaid. That means even families with a high income can be eligible.
The special income rule applies to other people who need institutional care. States can choose to extend Medicaid coverage to people who need such care, even if they have more income or assets than the limits.

Long-term care insurance and Medicaid. You can use both Medicaid and long-term care insurance to pay for your long-term care. In most states, some long-term care insurance companies partner with Medicaid, known as a long-term care partnership program. That means even if your income is above the limit, you can still get Medicaid. Not all long-term care insurance firms have this agreement. Some policies may even disqualify you from Medicaid coverage. Be sure to check your long-term care policy. And seek advice from an attorney if you have questions. Find out if your state offers a partnership program by asking your state’s department of insurance.

Find out more about insurance coverage for long-term care in our article Managing Costs of Long-Term Care.

Dual Eligibility for Medicaid and Medicare

If you’re aged 65 or older, you’re eligible for Medicare. Medicare is a government health plan for retirees. It also covers younger people with some disabilities. It’s possible to get both Medicare and Medicaid coverage. This can happen if you’re 65 or older and have low earnings and assets. It can also happen if you qualify for both another way. In general, Medicare will pay for your health services first. Then Medicaid will help pay for things that Medicare doesn’t cover. Find out more about Medicare in our article here. And find out more about dual eligibility here.

How to Sign Up for Medicaid

You can apply for Medicaid through your state agency. Or you can apply through the Health Insurance Marketplace. You’ll likely need proof of your earnings. You’ll also need proof of any assets and proof of address.

Resources

The CMS website has information about Medicaid and CHIP.

Healthcare.gov has an online calculator to check if you’re eligible for Medicaid or CHIP.

The Medicare Rights Center is a nonprofit. They have a lot of information about Medicaid and Medicare.

The Congressional Research Service has a detailed report about Medicaid.

Your Action Plan: What to Know About Medicaid

Ask your state’s Medicaid agency if you qualify for Medicaid.
Look into CHIP if you have children and your earnings are too high for Medicaid.
Check if your state’s Medicaid program has expanded benefits if you only qualify based on your earnings.
If you get SSI, check to see if you can get Medicaid too.
If you have a disabled child, check to see if you can get their healthcare covered by Medicaid.
If you need long-term care but earn too much for Medicaid, look into the different pathways to Medicaid.
If you have or want long-term care insurance, consider getting a policy that will partner with Medicaid.
If you’re over 65, or have a disability, find out if you can get both Medicaid and Medicare.