Basis of eligibility and maintenance assistance status

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Medicaid does not provide medical assistance for all poor persons. Even under the broadest provisions of the Federal statute, Medicaid does not provide health care services even for very poor persons unlessthey are in one of the groups designated below. And low income is only one test for Medicaid eligibility for those within these groups; their resources and assets also are tested against established thresholds (as determined by each State, within Federal guidelines).

States generally have broad discretion in determining which groups their Medicaid programs will cover and the financial criteria for Medicaid eligibility. However, to be eligible for Federal funds, States are requiredto provide Medicaid coverage for most individuals who receive Federally assisted income-maintenance payments, as well as for related groups not receiving cash payments.

The following displays the mandatory Medicaid eligibility groups:

  • Recipients of Aid to Families with Dependent Children (AFDC);
  • Children under age 6 who meet the State’s AFDC financial requirements or whose family income is at or below 133% of the Federal poverty level (FPL);
  • Pregnant women whose family income is below 133% of the FPL (services to the woman are limited to pregnancy, complications of pregnancy, delivery and three months of postpartum care);
  • Supplemental Security Income (SSI) recipients (or those aged, blind and disabled individuals who qualify in States that apply more restrictive eligibility requirements);
  • Recipients of adoption assistance and foster care who are under Title IV-E of the Social Security Act;
  • All children born after September 30, 1983 in families with incomes at or below the FPL. (They must be given full Medicaid coverage until age 19. This phases in coverage, so that by the year 2002, all poor children under age 19 will be covered);
  • Special protected groups (typically individuals who lose their cash assistance from AFDC or SSI due to earnings from work or increased Social Security benefits, but who may keep Medicaid for a period of time); and
  • Certain Medicare beneficiaries (described later).

Sates also have the option to provide Medicaid coverage for other “categorically needy” groups. These optional groups share the characteristics of the mandatory groups, but the eligibility criteria are somewhat more liberally defined. The broadest optional groups that States will receive Federal matching funds for coverage under the Medicaid program include:

  • Infants up to age one and pregnant women not covered under the mandatory rules whose family income is no more than 185% of the FPL (exact percentage of FPL is set by each State);
  • Children under age 21 who meet the AFDC income and resources requirements, but who otherwise are not eligible for AFDC;
  • Recipients of State supplementary income payments;
  • Certain aged, blind or disabled adults who have incomes above those requiring mandatory coverage, but below the FPL;
  • Persons receiving care under home and community-based waivers;
  • TB-infected persons who would be financially eligible for Medicaid at the SSI income level (but eligibility is only for TB-related ambulatory services and for TB drugs);
  • Institutionalized individuals with income and resources below specified limits; and
  • “Medically needy” persons (described below).

The option to have a “medically needy” (MN) programallows States to extend Medicaid eligibility to additional qualified persons with significant health care expenses who have income in excess of the mandatory or optional categorically needy levels. Such persons may “spend down” to Medicaid eligibility by incurring medical and/or remedial care expenses to offset their “excess” income, — thereby reducing it to a level below the maximum income allowed by that State’s Medicaid plan. States may also allow families to establish eligibility for MN coverage by paying monthly premiums to the State in an amount equal to the difference between the threshold allowance for income eligibility, and a family’s income (reduced by any unpaid expenses incurred for medical care in previous months).

The “medically needy” Medicaid program does not have to be as extensive as the “categorically needy” program in a State, but there are certain requirements. If a State has any MN program, certain services must be provided as a minimum (the State may also choose to include additional services); and in any MN program, a State is required to provide coverage to certain children under age 18 and pregnant women who are MN. A State may electto provide eligibility to certain other MN persons also: aged, blind, and/or disabled persons; caretaker relatives of children deprived of parental support and care; and certain other financially eligible children up to age 21. In 1994, there were 40 MN program which provided at least some services for at least some recipient groups.

The Medicare Catastrophic Coverage Act (MCCA) of 1988 made some significant changes which affected Medicaid. Although much of the MCCA was repealed, the Medicaid portions remain in effect. For Medicaid nursing facility recipients, the MCCA protects enough of the institutionalized spouse’s income and resources to assure a moderate level of support for the spouse in the community. As a result, less income and resources remain available to contribute to the cost of the nursing facility care. Thus, the institutionalized spouse qualifies for Medicaid earlier than would have been true previously.

Once eligibility for Medicaid is determined, coverage generally is retroactive to the third month prior to application. Medicaid coverage generally stops at the end of the month in which a person no longer meets the criteria of any Medicaid eligibility group. In addition to the Medicaid program, most States have additional “State-only” programs to provide medical assistance for specified poor persons who do not qualify for Medicaid. Federal matching funds are not provided for these State-only programs.

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