As originally conceived, the Medicaid program was to have served primarily the very poor and near poor who qualified or were close to qualifying for cash welfare programs. It was to have functioned much like private health insurance, with service coverage focused on primary and acute health care needs. Over time, Federal and state actions have expanded Medicaids authority, the scope of its coverage of long-term care services, and its eligibility options for beneficiaries who do not meet the traditional welfare-based definition of poor. By the end of its first decade, Medicaid had become a major source of public funding for institutional long-term care. By the end of its third decade, it had become the major public funder of home and community long-term care services as well.
Medicaids role in financing long-term care has developed in sporadic increments--often in reaction to problems occupying center stage at a particular time. As a result of incremental policymaking combined with vast variations in how states cover long-term care, the various facets of Medicaids financial eligibility provisions may appear to be disjointed. In particular, there are many provisions with major eligibility discontinuities--wherein a slight change in individuals personal circumstances can result in huge differences in the kinds (and levels) of benefits they are eligible for. As a result, individuals in similar circumstances can be treated differently. The purpose of this chapter is to present the relevant provisions in a way that is most useful to state policymakers and advocates.