Medicaid financial eligibility provisions are deeply rooted in two Federally financed cash assistance programs to help support low-income individuals and families: the former Aid to Families with Dependent Children (AFDC) program, which provided income support for low-income families with children, and the Supplemental Security Income (SSI) program for the Aged, Blind, and Disabled.2 (In 1996, welfare reform legislation replaced AFDC with a new program, Temporary Assistance for Needy Families [TANF].)
Like AFDC/TANF and SSI, Medicaid is a means-tested entitlement program. That is, anyone qualifies for Medicaid if (a) their income and assets do not exceed the state thresholds specific to their eligibility group, and (b) they meet all other relevant eligibility criteria. Medicaid eligibility rules fall into two basic sets: categorical and financial. The categorical set defines particular categories of persons for whom Federal law permits coverage. Individuals needing long-term care services generally fall into one of three Medicaid categories: aged 65 or older, blind, or under age 65 with a disability.
Services for Medicaid-Eligible Persons
Medicaid criteria for determining who is blind or has a disability are generally the same as those used by the Social Security Administration for SSI. To qualify in a disability category, a person must have a long-lasting, severe, medically determinable physical or mental impairment. The person must also be unable to work--defined in 2010 in part as earning less than $1,000 per month (net of income-related work expenses), a level of earning considered by regulation as evidence of ones ability to engage in Substantial Gainful Activity (SGA).4
Anyone not meeting these criteria cannot receive Medicaid through the disability eligibility category, even if they have extensive medical needs or high medical bills. (Special exceptions--allowing Medicaid eligibility for certain former child beneficiaries of SSI disability benefits and for persons who do not meet one or more of the usual SSI disability criteria because they earn more than $1,000 per month--are discussed later in this chapter.)
Although Medicaids financial eligibility rules for people who are elderly or have disabilities are built on a foundation of SSI rules, many exceptions and variations enacted over the years make them work better for low-income persons who need health care but not cash assistance.