What is Medicaid?
Medicaid is a joint program between the states and the federal government that provides certain medical and health benefits for low income individuals and families. The states administer and manage the program on a state by state level. Each state eligibility and requirement for enrollment varies. The majority of people served by Medicaid in the United States are low income adults, children, and individuals with certain disabilities. Currently in the United States the Medicaid System is the largest source of funding provided to support low income individuals in the US
What is Medicaid’s History?
As part of the Social Security Amendments of 1965 which amended the Social Security Act with Title XIX, Medicaid was created. Medicaid was established as a program to support the states in providing medical coverage for their low income residents. Medicaid was established to provide funding to support the states residents who are unable to purchase health insurance for themselves due to financial limits. Some of the candidates for Medicaid vary, however they have been known to include the blind, disabled, and pregnant women. As part of the program each state has the right to limit who is eligible to participate in the program. Additionally the benefits provided through the Medicaid program varies from state to state. Acceptance into the Medicaid program in one state does not constitute acceptance in another state.
The Medicaid Drug Rebate Program and the Health Insurance Premium Payment Program (HIPP) were created by the Omnibus Budget Reconciliation Act of 1990 (OBRA-90). This act helped to add Section 1927 to the Social Security Act of 1935 which became effective on January 1, 1991. This program was formed due to the costs that Medicaid programs were paying for outpatient drugs at their discounted prices.
The Omnibus Budget Reconciliation Act of 1993 (OBRA-93) amended Section 1927 of the Act as it brought changes to the Medicaid Drug Rebate Program, as well as requiring states to implement a Medicaid estate recovery program to sue the estate of decedents for medical care costs paid by Medicaid. Source Wikipedia
On March 2010 the Affordable Care Act put in place a provision to expand Medicaid eligibility. This is part of the Medicaid Expansion provision starting in 2014; However the Supreme Court ruled on June 2012 that the states had control over their Medicaid program, and that each state had to make a decision on whether they would participate in the Medicaid Expansion program. The Medicaid Expansion eligibility would start with individuals making 133%-400% within the federal poverty level.
Medicaid is available in two forms, Community Medicaid; which supports individuals with Health insurance. These are individuals with little to no income. The second is the Medicaid Nursing home Support. This part of the programs financial support the nursing home costs for an individuals based on the fact the individuals will provide 100% of their income minus $66.00 per month for non-nursing home expenses.
Here is a list of the State Medicaid Applications for various states
Medicaid requirement varies from state to state; within each category there are requirements other than income that is necessary for Medicaid. Some of these other requirements include assets, age, pregnancy, disability, blindness, income and resources, and Citizenship status.
The Deficit Reduction Act of 2005 (DRA) states anyone seeking Medicaid must be able to produce documents to prove citizen or resident alien status in the United States. There are a few exceptions. These exceptions included Emergency Medicaid for the pregnant and disabled regardless of immigration status.[ Special rules exist for those living in a nursing home and disabled children living at home. A child may be covered under Medicaid if they are a U.S. citizen or a permanent resident.
The CHIP (The Children Health Insurance Program) Provides medical insurance and support for children regardless of the eligibility status of its parents or guardians.
Medicaid & Gifting
Due to the Medicaid Income requirements, there are various gifting rules put in place by the IRS to avoid a senior gifting all their money away to family or friends to meet the Medicaid Eligibility. This is known as the look-back period. When a person applies for Medicaid the IRS will look back at the last five year of person’s financial history. They will calculate the total amount of gifts given during that point as income and the applicant will be penalized one for one. There is a federal gift tax rule that is completely different than what is used for Medicaid. The Federal Gift Tax rule, states any gift less than $13,000 dollars does not have to be reported to the IRS.