Medicaid is a way for people to get access to lower-cost health care. Often, it’s no cost to the person receiving the care. Medicaid can cover children and pregnant women as well as people with disabilities, some eligible low-income people, and elderly adults.
States manage Medicaid, so the requirements for eligibility can vary depending on the state. Your state may have its own name for the Medicaid program there as well. Things like the drugs covered by Medicaid and how much coverage is available all depend on the state.
The following are things to know about Medicaid in general, as well as regarding eligibility.
Medicaid vs. Medicare
Medicare is an insurance program that pays medical bills from trust funds that cover individuals paid into. Medicare mainly serves people who are over the age of 65, regardless of income. It can also cover young people who are disabled and patients receiving dialysis.
Patients pay part of their costs in the form of deductibles for hospital stays and other costs. There are also small monthly premiums that are paid for non-hospital coverage under this federal program. The Medicare program is essentially the same throughout the country, and it’s run by the Centers for Medicare & Medicaid Services, which is an agency of the federal program.
Medicaid, by contrast, is an assistant program primarily serving low-income people. The patients typically don’t pay any part of their costs for covered expenses, although, on rare occasions, a small co-pay might be required.
Medicaid is a federal-state program that’s run by state and local governments but within federal guidelines.
How Do States Verify Medicaid Eligibility?
For long-term Medicaid eligibility in most states, there are asset and income limits. In general, for a single senior applicant, the income limit for 2022 is $2,523 per month, and the asset limit is $2,000, although, again, eligibility varies by state.
A state Medicaid agency will put the burden of proof for verifying monthly income on an applicant. What this means is that Medicaid requires applicants to provide the needed and requested documentation to verify what’s written in their application is true.
The applicant has to provide proof that his or her income, earned and unearned is equal to what is being written on their application.
Income documentation could include pay stubs, award letters from Social Security, pension statement documentation from the VA, or a written statement from an employer or family member providing support. Documentation can also include an income tax form. If there’s no other way to prove income, a Medicaid agency might use a self-declaration of income form.
Some states will cross-report reference income using a computerized system to determine if an applicant is telling the truth. In California, the Income Eligibility Verification System is an electronic database that can be used to match income information from an applicant to other databases to see if it’s accurate.
The databases that might be used to verify income include the Disability Insurance Benefits database, state welfare information files, and files from the Social Security Administration.
If a senior receives Medicaid benefits, they have to report if they have any change in their assets or income, like an inheritance or an increase in their veteran’s benefits. They have to report it to the Medicaid agency in their state because Medicaid will have to redetermine their eligibility based on this information. If someone fails to report these changes, it can lead to consequences like an ending of their Medicaid benefits, a fine being levied, or they could have to reimburse Medicaid for their expenses. They might even be prosecuted.
Most states have time limits that apply within which a recipient has to report changes. It’s usually 10-30 days.
All states have what’s known as a look-back period. The state agency governing Medicaid reviews all the past transfers someone makes within a certain period from the date of their Medicaid application. It’s usually 60 months. During this time, which is right before the date of your Medicaid application, Medicaid goes over all asset transfers to make sure you didn’t sell assets for less than market value or give away assets.
Any asset transfer within the determined look-back period is reviewed. If an applicant violates the rule, a penalty period of ineligibility for Medicaid is set. The reason for this ineligibility period is that if the assets hadn’t been sold, gifted, or transferred, they could have theoretically been used to pay back the long-term care costs for an individual.
If someone gifts assets or transfers them before the look-back period, there’s no penalty.
Even after the look-back period, if a beneficiary of Medicaid comes into money and then gives some or all away, they’re in violation of the look-back rule. The look-back period doesn’t necessarily apply to all programs from Medicaid, though.
It’s primarily Medicaid benefits for eldercare and long-term care.
Specific Situations When Someone Might Be Eligible for Medicaid
If you’re low-income and you think you’re pregnant, you’ve been diagnosed with cervical or breast cancer, or you’re a child or teen under the age of 18, you might consider applying for Medicaid. If you’re over the age of 65, you are blind, you have disabilities, or you need nursing home care, you might also be eligible for Medicaid.
People who are leaving the Temporary Assistance for Needy Families program and need health coverage or are a family with children under 19 who are low income or have no income could be eligible.
In some cases, such as if you’re over 65 and your income is higher than the limits, but you have medical bills you owe, you might still be eligible.
What Does Medicaid Cover?
Federal law requires states to cover certain mandatory coverage benefits, but then states have the choice of other benefits that are optional. Mandatory benefits include inpatient and outpatient services at hospitals, doctor services, lab, and X-ray services. Home health services are also mandatory.
Optional benefits include prescription medicines, physical therapy, occupational therapy, and case management.
States can determine the scope of the services, the amount, and the duration they’re willing to cover under pretty broad guidelines at the federal level.