An Overview of Medicaid

Health care and health insurance are two essentials that you don't want to go without as you age. Today's seniors face a variety of challenges, such as coping with new technology and living in a pandemic. Unfortunately, being able to afford rising medical bills on a fixed income is one of them. According to the American Medical Association, health care spending increased by 9.7% in 2020 alone, rising to an average of $12,530 per person.

In times like these, Medicaid is a critical resource, especially if you're looking for a way to pay for long-term care or are struggling to pay for routine medical care. In fact, Medicaid may even help pay for some out-of-pocket costs if you’re aged 65 and over and qualify for Medicare. Learn more about the benefits that Medicaid has for older adults in this guide.

Medicaid was created by the Social Security Act of 1965. It's sponsored and overseen by the federal government and is managed independently by each state. Today, over 90 million Americans are enrolled in Medicaid and CHIP. In fact, about one in five Americans receive coverage through these programs, including pregnant women, young children, cancer patients and vulnerable adults.

Every year, Medicaid pays for $748 billion in medical services with a large portion going toward hospital stays and long-term care. Medicaid is the primary payer of nursing home care in the United States and covers as many as two-thirds of nursing home residents in some states, since these services are difficult for many seniors to afford. Although benefits vary by state, Medicaid may cover a wide variety of services depending on your specific needs.

• Primary medical care
• Hospital stays
• Emergency room care
• Labs and imaging
• Prescription medications
• Skilled nursing
• Home-based care
• Nursing home alternatives 

Because Medicaid is administered by each state, eligibility requirements vary depending on where you live. Medicaid also includes several programs that target specific populations. Fortunately, most states have expanded eligibility criteria for individuals who are aged 65 or older, blind, disabled or require a nursing-home level of care regardless of their age. 

You should check your state's eligibility criteria for specifics, but here are a few general requirements.

• You must be a U.S. citizen or legal resident in the state where they're applying.
• You must demonstrate significant medical or financial needs.
• If you require long-term care, you must complete a functional needs assessment.
• You can apply for Medicaid even if you have other health insurance.

In Medicaid expansion states, you can qualify for full-health insurance coverage if your household income is no more than 138% of the federal poverty level. This equals $25,267 for a two-person household in 2023. 

For those who require nursing home care or prefer home-based services, many states set the income limit at 300% of the federal benefit rate, which is $65,808 per year for a two-person household. 

Medicaid also has restrictions on applicants' assets; although, there are usually exemptions for a primary home, valuables and personal belongings. Seniors should be aware that their estate may be required to reimburse Medicaid for the cost of services provided.

Medicaid provides a full range of medical services from routine care to emergency medical treatment. It's an important source of coverage for many individuals who require long-term care and skilled nursing. Here are a few of the services that it covers.

Mandatory Services

• Transportation to medical appointments
• In and outpatient hospital care
• Preventive health screenings
• Primary and specialty care
• Skilled nursing
• Home health care
• Labs and imaging

Optional Services Available in Some States

• Prescription drug coverage
• Podiatry
• Physical and occupational therapy
• Optometry
• Dental care
• Chiropractic services
• Hospice
• Private-duty nursing
• Self-directed care
• Medicaid waiver services

Medicaid is a lifeline that provides valuable medical services to one in five Americans. However, it does have some limitations. All services must be deemed medically necessary and must be authorized by your state's Medicaid program. In general, Medicaid does not cover the following services or supplies.

• Over-the-counter medications
• Custodial care, such as help with grooming, chores and errands
• Assisted living or in-home assistance
• Services provided by a spouse or relative
• Medical equipment used in a nursing facility
• Experimental procedures or medications
• Personal comfort items
• Vocational training
• Charges for missed appointments
• Cosmetic surgery
• Bandages, adult diapers and consumable supplies

Medicaid waivers allow states to offer additional services that aren't usually covered by Medicaid. Many programs that provide Home- and Community-Based Services are called 1915(c) waivers because they're authorized by this section of the Social Security Act. 

The benefits of these programs are two-fold. They give seniors more choice when it comes to where they receive care. They also save the government money by allowing seniors to receive certain services outside of nursing homes.

Waivers cover a variety of services and supports that help seniors remain in their own homes, including housekeeping, pest control, home accessibility modifications and durable medical equipment. Some waivers even pay for services provided in assisted living facilities.

Medicaid benefits are administered at the state level, so you must contact the program in your area to qualify. County health and human services offices can assist with the application process, or you may apply online through your state's application portal. 

You can also see if you qualify for Medicaid by visiting Healthcare.gov or calling (800) 318-2596. Your application will automatically be forwarded to your state's Medicaid agency for processing.