A Beginners Guide To Medicaid

What is Medicaid? Who qualifies for Medicaid? What does Medicaid cover?

Quick summary
Medicaid is the government's program designed to deliver health insurance to people with low income and few or no assets. Many people confuse Medicaid with Medicare, because they have similar-sounding names. Actually, they have completely different eligibility requirements and benefits, and they serve different purposes.

Almost anyone over the age of 65 qualifies for Medicare, while Medicaid is available only to people who are over 65, are blind or have a disability, and who meet income and resource limits. Even if your parents aren't extremely low-income and do have some assets, they may still be eligible for Medicaid, particularly if they have high medical costs -- so it's important to be familiar with the program. This is particularly true if either or both seniors need long-term care, for which Medicaid can provide coverage even if you own your home. Here's what you need to know about Medicaid:

What is Medicaid?
Medicaid is a federally-supported but state-administered program intended to provide health insurance to low-income, low-asset individuals and families, including people with disabilities and people over the age of 65.

Who qualifies for Medicaid?
Medicaid eligibility guidelines vary from state to state, but all plans are required to provide coverage to people over the age of 65 who have limited income and resources, as well as people who are disabled or blind and have low income and few assets. Certain portions of your income would not be counted in determining Medicaid eligibility, nor would your home and car. You can find the specific Medicaid requirements for your state online at the Medicaid/Medicare section of www.govbenefits.gov.

Even if the seniors make more money than Medicaid income limits allow, they might still qualify if they have substantial medical bills. This is because most state Medicaid programs subtract applicants' medical bills from their income to determine eligibility. The details of these calculations, called "Medicaid spend-down" rules, vary from state to state. There are also special, more lenient income and asset rules if one senior lives in a nursing facility while the other remains at home.

Can we use both Medicare and Medicaid at the same time?
Yes, and Medicaid might cover certain items or services that Medicare won't, such as eyeglasses, hearing aids, and dental care. If you meet eligibility requirements, Medicaid also pays Medicare premiums, copayments, and deductibles.

What does Medicaid cover?
If you qualify for Medicaid benefits, you are entitled to coverage for a variety of medical expenses, including hospitalization, outpatient care, ambulatory services, labs and X-rays, nursing facility services, dental care, home health services, part-time in-home nursing care and some medical supplies. (Prescription drugs are covered through the Medicare prescription drug benefit, though Medicaid may pay your Part D plan premiums and copayments and also pay for some drugs not covered at all by the Part D plan.)

For many people, one of the most significant benefits of Medicaid is that it covers long-term custodial care in a nursing facility, as well as long term in-home care, neither of which is covered by Medicare.

What doctors can we see?
You will have to check. Medicaid doesn't pay money to you; instead, it sends payments directly to your healthcare providers. But because of low Medicaid reimbursement rates, many doctors and some other healthcare providers don't accept Medicaid patients. So it's very important to determine whether the doctors or other providers you want to see actually accept Medicaid before you make an appointment with them.

What isn't covered by Medicaid?
Just as Medicaid eligibility requirements vary from state to state, so does the list of what is and isn't covered. But generally, Medicaid doesn't cover any elective procedures or cosmetic surgeries, medical procedures related to obesity (such as gastric bypass surgery), or prescription drugs for people who are enrolled in Medicare. Also, depending on the state's rules, you may have to pay a small part of the cost (a co-payment) for some medical services that Medicaid does cover.

What if my income is too high to qualify for Medicaid?
Even if you don't meet the income eligibility requirements, you may still qualify for some Medicaid benefits. For example, a specific Medicaid program (the Specified Low-Income Medicare Beneficiary Program, or SLMB) that pays the monthly Medicare Part B premium has higher monthly income limits than most states' basic Medicaid coverage. Also, if you are disabled or blind, the income eligibility limits for you might be higher than for people who qualify based on age alone.

How does Medicaid spend-down work?
If your assets would qualify you for Medicaid but your income is over your state's Medicaid limit, in most states you can still qualify for Medicaid coverage if your medical bills add up to more than the amount by which your income exceeds the Medicaid limit. This spend-down provision, called "share of cost" in Medicaid jargon, is similar to a deductible under a typical health insurance policy, because it's the amount you have to pay out of your own pocket before Medicaid coverage kicks in.

What types of senior communities can I enter under Medicaid coverage?
Certain assisted living and skilled nursing communities can accept residents who are on Medicaid but, typically, those communities have a percentage of their total beds that can be occupied by Medicaid residents. You will need to check with the individual communities to find out if they will accept Medicaid. Some communities will make an arrangement that, if you can pay privately for 6 months to one year, they will assist you in converting your payments to Medicaid.