Medicaid is a health insurance program that’s funded by both the federal and state governments. The program is designed to provide free or low-cost healthcare to low-income or needy residents and their families.
After the program was developed in 1965, the Affordable Care Act of 2010 included legislation that further regulated the qualifications for Medicaid eligibility, specifically how income is calculated to meet program guidelines. This legislation expanded the number of Americans eligible for Medicaid coverage.
The availability of coverage through Medicaid is regulated on a state level. State governments are in charge of administering their own Medicaid programs and therefore, can set their own eligibility guidelines. When determining if you qualify for Medicaid, it’s important to review your state’s specific regulations.
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While not every state is required to implement a Medicaid program, almost all states in the U.S. have their own programs in place. One of the most basic qualifications set for the Medicaid program is income, which is determined by using the federal poverty level (FPL). The FPL is the minimum income the average family should need for basic living necessities. Families with low incomes who are elderly residents, persons with disabilities, or pregnant women generally meet Medicaid eligibility requirements.
Your modified adjusted gross income (MAGI) is what’s compared against the current FPL to determine if you qualify for Medicaid. It includes your adjusted gross income (AGI) plus non-taxable Social Security benefits, tax-exempt interest, and untaxed foreign income. The specific FPL your income is compared to is determined by the number of people living in your household.
The 2019 FPLs as they correspond to household size are as follows:
- One household member: $12,490.
- Two household members: $16,910.
- Three household members: $21,330.
- Four household members: $25,750.
- Five household members: $30,170.
- Six household members: $34,590.
- Seven household members: $39,010.
- Eight household members: $43,430.
In addition to meeting financial eligibility requirements, there are additional stipulations you must meet to prove your eligibility for Medicaid. You must be a resident in the state in which you receive Medicaid coverage. To qualify for the program, you must also be a U.S. citizen or qualified non-citizen, such as a lawful permanent resident.
State programs may also include different eligibility groups, such as needy residents and their family members who are:
- Parents or caregivers.
- Receiving other government assistance.
Medically Needy Program
States can also establish a “medically needy program” that provides Medicaid coverage to residents who earn too much income to qualify under another eligibility group but have significant healthcare needs. To become eligible under this category, you must “spend down” the income you earn that’s above the state’s specific medically needy standard. You spend down this income when you don’t carry health insurance and incur expenses for your medical and remedial care.
Once the medical expenses you’ve incurred exceed the difference between your income and the state’s income guidelines for medically needy eligibility, you qualify for Medicaid coverage. The Medicaid program then pays the expenses you incurred that exceed the medical expenses you had to pay to become eligible for coverage.
How to Apply for Medicaid
You can apply for Medicaid through the Health Insurance Marketplace or through your state’s Medicaid agency. To apply through the Marketplace, you must first visit the Marketplace website and create an account. You’ll need to provide information about your household when applying, including your income and the number of family members you have. Once you’ve submitted your application, the Marketplace will forward it to your state’s Medicaid agency if it determines you may qualify for the program.
You can locate your state’s Medicaid office if you prefer to apply directly through the agency. In most cases, your state may allow you to apply for Medicaid online but you may also need to mail or fax in documents to prove your eligibility. Most state agencies can also provide you with a paper application if you prefer to apply by mail, fax, or in person.
No matter which method you choose to apply for Medicaid, you’ll need to submit certain documents during the application process to prove your eligibility, including:
- Your birth certificate or driver’s license.
- Paycheck stubs or W2s.
- Bank account statements.
- Tax returns.
- Medical records (to prove a disability).
- Your lease agreement or mortgage statement.
- Utility bill statements.
Your state Medicaid agency has 45 days to process your application and determine if you qualify for the program. If your application is tied to a disability, your state Medicaid agency has 90 days to process your application and decide if you’re eligible for the program.
Effective Date of Coverage
If you’re eligible for your state’s Medicaid program, your coverage is effective on the date of the application or on the first day of the month of the application. If you would have been eligible during the period you applied, you may receive benefits retroactively for up to three months prior to the month you applied.
Appealing a Denial
If you were denied Medicaid coverage but you feel you should qualify, you can appeal the agency’s decision. The process to appeal a Medicaid decision can vary by state and your state’s specific instructions for appeal should be provided on your denial letter.
Once you’ve successfully submitted an appeal to your state’s Medicaid agency, the agency may begin the appeals process itself. However, if your eligibility denial has to do with not meeting the income qualifications based on your MAGI, the agency may send your appeal to an Exchange or Exchange Appeals Entity to be handled. In some cases, the appeal may be handed to a different state agency, if necessary.
If you need assistance paying for health care, consider completing a Medicaid application, even if you don’t think you qualify financially. You may qualify with your state in a different eligibility group or through the medically needy category. Medicaid can help ensure you stay healthy while maintaining financial stability.
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