How to qualify for Medicaid: Tips and eligibility requirements

If you need long-term care and cannot afford the real care you need or any form of insurance or annuity protection, you will need to apply for coverage under the Medicaid plan. The program provides managed care for people with disabilities or those 65 years of age or older with income and assets below certain federal and state thresholds.

Getting Medicaid eligibility is often challenging, but the following steps can help determine if you are eligible and increase your chances of getting coverage.

Understand Medicaid asset limits and eligibility requirements

Although Medicaid is federally funded, it is administered at the state level, and each state has its own set of rules and regulations for the program. Allowable income and asset levels vary from state to state, so be sure to find out where your balance sheet is relative to the threshold.

If you are single, unless your state has a higher limit, cash or other assets other than your residence, vehicle, and other necessary items usually cannot exceed $2,000.

If you are married and your spouse is still able to live independently, as of January 2021, they can retain 50% (or 100% in some states) of your common assets, up to a maximum of $130,380. Your single or joint income usually cannot exceed 138% of the federal poverty level, although several states have thresholds higher than this amount.

In almost all cases, you must also prove that you are a disabled person through a medical document. However, certain exceptions apply (e.g. women with breast or cervical cancer or anyone diagnosed with tuberculosis). You must also be a U.S. citizen or have a green card and prove that you live in the state. (Another list of exceptions that apply to these parameters, such as victims of human trafficking or people classified as “medically in need” by Medicaid.)

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Start the spending process

If your assets or income exceed the threshold in your state, you will need to reduce your estate. If you plan at least 5 years in advance (or 30 months in California), you can gift your assets or belongings to your children or other responsible parties that you can count on to use them on your behalf.

Depending on the laws of your state, you can also create an expense trust under certain circumstances. However, this arrangement has restrictions, and any funds left in the trust after death cannot be transferred to relatives.

Key points

  • In 2021, President Joseph Biden began to cancel the previous government’s attempt to impose job requirements on Medicaid applicants.
  • Applicants must meet certain federal and state income level thresholds to be eligible for Medicaid.
  • Experts recommend that potential applicants discuss eligibility to “spend” their assets to obtain Medicaid with aged care lawyers and financial advisors.

Apply for insurance

You can start applying for Medicaid in many ways. You can visit www.medicaid.gov, www.healthcare.gov or the website of the Medicaid agency in your state. If you cannot access online, Medicaid has a local qualification office in each state where you can submit your application, or you can apply over the phone.

One of the most common reasons people are denied coverage is incomplete application information. Before starting to fill out the application, please collect the following documents to submit:

  • Birth certificate or driving license (to prove your age)
  • Proof of citizenship
  • Documents of all assets and income
  • A copy of your mortgage, lease, rent receipt, utility bill, or other documents proving your place of residence
  • Medical records to keep track of your disability
  • Information about any other health insurance you may have

Be sure to check with your specific state to see if they require different or additional documents and the standard documents listed above.

Work requirements and Medicaid for 2018 and beyond

In April 2021, President Joseph Biden began to cancel the previous government’s attempts to establish and implement new eligibility requirements for adults without children or disabilities. These requirements will allow states to cancel Medicaid insurance for children without children who are not disabled, have no job, or participate in work-related or volunteer programs. As of April 2021, even approved states have not enforced job requirements because the Federal Court has invalidated these regulations.

To encourage states to expand Medicaid, President Biden’s 2021 US rescue plan includes more matching federal funds as incentives. The U.S. Department of Health and Human Services has now revoked work requirements for Medicaid programs in Arizona, Arkansas, Indiana, Michigan, New Hampshire, Ohio, South Carolina, Utah, and Wisconsin. Kentucky and Nebraska withdrew their job requirements after initial approval.

According to the Pew Charitable Trust, at least 15 states applied for or obtained permission to impose work requirements during the last government. The Nonpartisan Research and Policy Center for Budget and Policy Priorities reported that in 2018, Arkansas removed more than 18,000 Medicaid beneficiaries from the list because they did not meet the new eligibility requirements.

Get some expert help

Before or during the Medicaid application process, you may need to consult with two experts who can help you increase your chances of getting coverage. The first expert is an attorney who specializes in old age law and thoroughly understands the Medicaid law in your state. The other person is a financial advisor who can help you create a Medicaid trust or other expenditure measures you need to take.

Frequently Asked Questions about Medicaid Eligibility

Does every state provide expanded Medicaid?

39 states and Washington, DC have received federal funding to expand the Medicaid program under the ACA. Voters in Missouri approved the Medicaid plan, which was originally scheduled to take effect in mid-2021, but suspended its implementation after Republican lawmakers refused to provide funding.

Can I qualify even if my state does not expand Medicaid?

In states without expanded Medicaid programs, the level of eligibility is lower than in states that have expanded. Even if your state does not expand the Medicaid program, and your income seems to be below the level of financial assistance through the Marketplace program, you should complete the Marketplace application.

Does the federal poverty level vary from state to state?

Alaska and Hawaii have higher federal poverty levels. HHS sets three different numbers each year: one for the continental United States, a higher level for Hawaii, and a higher level for Alaska. But in the continental United States, the federal poverty level has not changed.

Bottom line

Eligibility for Medicaid is not a simple process. As states change, registration becomes easier and easier. Before starting this process, get all help from a financial advisor and qualified aged care lawyer to maximize your chances of acceptance.

In addition, be prepared to plan ahead and significantly reduce the size of your acceptable estate through a gift or donation plan to meet the threshold of your state.

(For further reading, see: Medicaid and medical insurance.)

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