Understanding Medicaid Home and Community Services: A Primer, 2010 Edition. Overview of Medicaid Financial Eligibility

10/29/2010

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

The highlights of Medicaid benefits listed here provide a general context for the financial eligibility discussion in this chapter. (For a more detailed discussion, see Chapter 4 and Chapter 5.)

  • Once determined eligible for Medicaid, beneficiaries are entitled to the full range of health and long-term care Medicaid services covered in their state. To receive long-term care services, however, they must also meet service eligibility criteria.

  • Medicaid health care coverage (e.g., hospital, physician, or prescription drug services) can be extremely important to persons who need long-term care services, especially if they do not have Medicare or private health insurance to cover these expenses.

  • Medicaid services for children can be more extensive than Medicaid services for adults or than services typically covered under private insurance policies.

  • Medicare and Medicaid cover many of the same health services (e.g., hospital, physician, and home health services). Medicare beneficiaries eligible under any of their state-defined Medicaid eligibility groups typically receive Medicaid coverage of Medicare cost-sharing requirements, including premiums, deductibles, and coinsurance. They also receive Medicaid services covered by Medicaid but not Medicare. The most notable examples are more extensive coverage of mental health services, long-term care institutional services, and personal care services, as well as home health services with a less intense medical orientation than services covered under the Medicare Home Health benefit.3

  • Nursing facility services are Federally mandated under Medicaid. States may provide other long-term care services at their option, which may be provided either to all eligibles under the Medicaid State Plan or to selected groups under a home and community-based services (HCBS) waiver. Under an HCBS waiver program, states can provide services not viewed as strictly medical (e.g., home modifications, habilitation, and respite care) if the services are required to prevent institutionalization.

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 one’s 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 Medicaid’s 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.

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