Medicaid Frequently Asked Questions

by Goldfarb Abrandt & Salzman LLP Important information regarding Medicaid

Why is Medicaid different in every state?

Medicaid is a joint federal-state program. It provides medical assistance to eligible needy persons. Unlike Medicare it is an entitlement program based on income and asset guidelines.

The federal contribution is approximately 50%. The states pay the remaining costs and they are given wide discretion about whom to cover and what benefits to provide. There is a single state agency in charge of the program in each state, but many states have the program administered by county and city governments.

Can I be barred from Medicaid if I just moved into a state?

States must provide Medicaid for eligible residents. States cannot place length of stay residency requirements.

Who is covered by Medicaid?

States vary depending on the options they have elected.

“SSI states” cover everyone who qualifies for the Supplemental Security Income program (aged, blind and disabled). These states cannot have rules that are more restrictive than the federal government rules for SSI.

“Section 209(b) states” adopt requirements that are more restrictive than the federal SSI rules. These states are Connecticut, Hawaii, Illinois, Indiana, Minnesota, Missouri, New Hampshire, North Dakota, Ohio, Oklahoma, Virginia.

States may also optionally cover “categorically needy persons.” These persons qualify for assistance such as SSI, but are not receiving it (for example, because they live in an institution). States may use a higher income standard, up to three times the SSI benefit amount for an individual living at home. If states do not also adopt the “medically needy standard” described below, they would be considered “Income Cap states.” “Income cap states” are AL, AK, CO, DE, ID, MS, NE, NM, SC SD, and WY. CT under a waiver allows spend down for institutionalized care and has an income cap for home care.

States may optionally cover “medically needy persons.” These are persons who would qualify for Medicaid categorically, but are “over income.” These individuals can “spend down” to the Medicaid level by deducting “incurred” medical expenses.

The following states have “medically needy programs: CA, CT, GA, HA, IL, KY ME, MD, MA, NH,NJ, NY, NC, ND, PA, RI, SC, TN, VT, VA, WA, WV, and WI (also, DC). CT under a waiver allows spend down for institutionalized care and has an income cap for home care.

Some states allow a “spend down” but do not permit nursing home costs to be included. These are AZ, AR, FL, IA, LA, OK and OR (TX does not include the aged in the spend down program).

Unfortunately this creates a hopeless web of rules in the different states and you must seek out advice in your state on how to deal with its rules!

What are the income and resource levels for Medicaid?

Income cap states limit income to three times the SSI benefit level. No spend down is allowed and any excess will disqualify the individual in these states.

For resources many states use the federal SSI levels.

The income standards are more complex. You would need to check with your state for the current level.

Will Medicaid pay for my Medicare premiums and deductibles?

Medicaid pays the deductibles, coinsurance and premiums for Medicare Part A and B for low income persons. These individuals are called “Qualified Medicare Beneficiaries” or QMB’s.

Can Medicaid place a lien on property or recover against an estate?

Aside from the resource rules described above, there are many exemptions, the biggest one being a homestead.

However, Medicaid may impose a lien on a recipient’s property under certain limited circumstances. States are also required to seek recovery from estates of Medicaid recipients. There are complex rules on estate recoveries.

Are adult children responsible for the medical bills of their parents?

In determining Medicaid eligibility of an adult, federal law does not permit states to use the income or resources of non-spouses. States cannot collect reimbursement from these relatives.

A few states have laws making adult children responsible for support of indigent parents. This however would apply for costs not covered by Medicaid.

Are well spouses legally responsible for Medicaid expenses of a sick spouse?

Federal Medicaid law permits states to “deem” the income and resources of the well spouse as available to the sick spouse. The extent of this “deeming” depends on whether the sick spouse is at home or institutionalized. States also vary in how they apply these deeming rules. In NY and some other states, the deeming rules do not apply, however Medicaid is allowed to sue the well spouse for a contribution. See NY Medicaid Article.

When there is a community spouse and an institutionalized spouse, there are federal guidelines as to both income and resources and how they are considered.

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