How Does Medicaid Work?
Good health is important to everyone.
If you can’t afford to pay for medical care right now, Medicaid can make it possible for you to get the care that you need so that you can get healthy – and stay healthy.
Medicaid is available only to certain low-income individuals and families who fit into an eligibility group that is recognized by federal and state law.
Medicaid does not pay money to you; instead, it sends payments directly to your health care providers. Depending on your state’s rules, you may also be asked to pay a small part of the cost (co-payment) for some medical services. (“Medicaid At-A-Glance 2011” may be downloaded from the bottom of the page.)
Medicaid is a state administered program and each state sets its own guidelines regarding eligibility and services.
Read more about your state Medicaid program by visiting your state‘s Public Assistance section.
Many groups of people are covered by Medicaid. Within these groups, certain requirements must be met.
These may include your age, whether you are pregnant, disabled, blind, or aged; your income and resources (like bank accounts, real property, or other items that can be sold for cash); and whether you are a U.S. citizen or a lawfully admitted immigrant.
The rules for counting your income and resources vary from state to state and from group to group.
There are special rules for those who live in nursing homes and for disabled children living at home.
Your child may be eligible for coverage if he or she is a U.S. citizen or a lawfully admitted immigrant, even if you are not (however, there is a 5-year limit that applies to lawful permanent residents). Eligibility for children is based on the child’s status, not the parent’s. Also, if someone else’s child lives with you, the child may be eligible even if you are not because your income and resources will not count for the child.
In general, you should apply for Medicaid if your income is low and you match one of the descriptions of the Eligibility Groups. (Even if you are not sure whether you qualify, if you or someone in your family needs health care, you should apply for Medicaid and have a qualified caseworker in your state evaluate your situation.)
Medicaid Expansion by State
Under the Affordable Care Act, states had the option of expanding their Medicaid programs with support from federal funding.
This expansion means that low-income consumers earning up to 133% FPL (in most states) have access to Medicaid.
Some of the largest states, including our headquartered state of Florida, still have not increased the income threshold for their Medicaid program. If you do not qualify for Medicaid in your state, you may qualify for a subsidized health plan through the state Marketplace.
In states where Medicaid has not expanded, many individuals fall into a gap. Your income must be at least 133% of poverty to qualify for a tax credit by federal standards. If you earn less than 133% and your state Medicaid program has increased income eligibility guidelines, you will be referred to the Medicaid program.
The table below indicates which states have broadened access to public health coverage. Some states have not yet determined whether or not they will expand.
District of Columbia
To help you see if you may be eligible for a variety of governmental programs, read one of our many articles on eligibility for Medicaid and other public programs in your state. You may also use the Benefit Finder at Benefits.gov to determine if you qualify for any assistance.
When Eligibility Starts
Coverage may start retroactive to any or all of the 3 months prior to application, if the individual would have been eligible during the retroactive period.
Coverage generally stops at the end of the month in which a person’s circumstances change. Most States have additional “State-only” programs to provide medical assistance for specified poor persons who do not qualify for the Medicaid program. No Federal funds are provided for State-only programs.
What is Not Covered
Even under the broadest provisions of the Federal statute (except for emergency services for certain persons), the Medicaid program does not provide health care services, even for very poor persons, unless they are in one of the designated eligibility groups. Low income is only one test for Medicaid eligibility; assets and resources are also tested against established thresholds.
Categorically needy persons who are eligible for Medicaid may or may not also receive cash assistance from the TANF program or from the SSI program. Medically needy persons who would be categorically eligible except for income or assets may become eligible for Medicaid solely because of excessive medical expenses.
Medicare / Medicaid Dual Eligibles
Dual eligibles are individuals who are entitled to Medicare Part A and/or Part B and are eligible for some form of Medicaid benefit.
Medicare – Medicaid Relationship
The Medicare Program (Title XVIII of the Social Security Act) provides hospital insurance, also known as Part A coverage, and supplementary medical insurance, also known as Part B coverage.
Coverage for Part A is automatic for people age 65 or older (and for certain disabled persons) who have insured status under Social Security or Railroad Retirement. Most people don’t pay a monthly premium for Part A. Coverage for Part A may be purchased by individuals who do not have insured status through the payment of monthly Part A premiums. Coverage for Part B also requires payment of monthly premiums.
People with Medicare who have limited income and resources may get help paying for their out-of-pocket medical expenses from their state Medicaid program. There are various benefits available to “dual eligibles” who are entitled to Medicare and are eligible for some type of Medicaid benefit. These benefits are sometimes also called “Medicare Savings Programs” (MSP).
For people who are eligible for full Medicaid coverage, the Medicaid program supplements Medicare coverage by providing services and supplies that are available under their states Medicaid program.Services that are covered by both programs will be paid first by Medicare and the difference by Medicaid, up to the states payment limit. Medicaid also covers additional services (e.g., nursing facility care beyond the 100 day limit covered by Medicare, prescription drugs, eyeglasses, and hearing aids).
Limited Medicaid benefits are also available to pay for out-of-pocket Medicare cost-sharing expenses for certain other Medicare beneficiaries.
The Medicaid program will assume their Medicare payment liability if they qualify.
Qualified Medicare Beneficiaries (QMBs), with resources at or below twice the standard allowed under the Supplemental Security Income (SSI) program and income at or below 100% of the Federal poverty level (FPL), do not have to pay their monthly Medicare premiums, deductibles, and coinsurance.
Specified Low-Income Medicare Beneficiaries (SLMBs), with resources at or below twice the standard allowed under the SSI program and income exceeding the QMB level, but less than 120% of the FPL, do not have to pay the monthly Medicare Part B premiums.
Qualifying Individuals (QIs), who are not otherwise eligible for full Medicaid benefits and with resources at or below twice the standard allowed under the SSI program, will get help with their monthly Medicare Part B premiums, if their income exceeds the SLMB level, but is less than 135% of the FPL.
Individuals who were receiving Medicare due to disability, but have lost entitlement to Medicare benefits because they returned to work, may buy Medicare Part A.
If the individual has income below 200% of the FPL and resources at or below twice the standard allowed under the SSI program, and they are not otherwise eligible for Medicaid benefits, they may qualify to have Medicaid pay their monthly Medicare Part A premiums as Qualified Disabled and Working Individuals (QDWIs).
To learn more about Medicaid eligibility and/or the Medicare Program, view Resources at the bottom of the page.
Integrated Medicare and Medicaid Models
CMS has created a specific website to provide information about our initiative for Integrated Care programs. This website provides valuable resources regarding integrated Medicare and Medicaid programs for States, health plans, and providers.
Image Credit: Henry J. Kaiser Family Foundation