It’s no secret that navigating health insurance in America can be tricky (to say the least). This is even more true for those that struggle from paycheck to paycheck.
Medicaid is a program that allows low-income individuals in the United States to receive affordable healthcare. Roughly 1 in 5 individuals in the US receive Medicaid.
But who and what does Medicaid cover and how is it different from Medicare?
Most importantly, how do you apply if you’re eligible?
Let’s dive in and take a closer look.
What is Medicaid?
In simple terms, Medicaid is a health insurance plan for people who are disabled or in lower-income brackets.
Medicaid is funded by the U.S. federal and state levels of government.
However, each state administers and manages its own individual Medicaid program. As a result, the care you will receive will depend on which state in which you’re a resident.
As of November 2020, over 70,000,000 individuals were enrolled in Medicaid.
What Does Medicaid Cover?
Because it varies from state to state, the exact coverage you’ll get will depend on where you live.
However, broadly speaking, every state’s program will cover the equivalent of Medicare Part A and Part B.
Under federal law, all Medicaid services must include:
- Doctor visits and services
- Radiology (labs and X-rays)
- Inpatient hospital care
- Short-term home health care
- Long-term care
In addition, Medicaid coverage of other services will vary from state to state and may sometimes involve a co-pay.
- Some of these include:
- Eye exams and glasses
- Dental care
- Hearing aids
- Physical therapy
- Chiropractic care
- Preventive services
- Family planning services
While Medicaid covers a broad range of medical care, programs usually don’t cover the following:
- OTC medications and supplements
- Cosmetic surgery
- Medical services outside of the US
- Custodial care
- Missed appointments
- Routine physical checkups
For more information on specific coverage provided by your state, visit the Medicaid website.
Who Qualifies for Medicaid?
Because Medicaid is operated and administered by the state, who qualifies will differ from state to state.
Needless to say, laying out the criteria for 50 states would take a while, but you can easily find out if you qualify by visiting your state’s Medicaid website.
Income and Family Size
Generally speaking, income is the biggest factor that will determine if you qualify for your state’s program.
The Affordable Care Act of 2010 helped expand Medicaid so that nearly all low-income individuals under 65 may qualify.
So if your income is lower than 133% of the federal poverty level, you will likely qualify for Medicaid.
The 2021 federal poverty level for individuals is $12,880 and $26,500 for a family of four.
In addition to income, you’ll usually also have to be a resident of the state where you’re getting Medicaid and a citizen or permanent resident of the United States. However, some states offer exceptions to this.
In addition to income, there are a number of limits on how many assets an individual can have in order to qualify.
These assets include checking and savings balances, home equity, investments, annuities, and others. Most states have an asset limit of $2,000.
However, there are some assets that don’t count towards this limit. These include the value of one car, your primary residence, life insurance policies, and a funeral fund.
Because the asset limit of most states is so low, many individuals may choose to spend their “countable” assets on “non-countable” assets.
One example of this would be using your savings (a countable asset) to pay down your mortgage since your primary residence doesn’t count towards your asset limit.
Many states have special programs for individuals and families with specific medical needs. For example, an uninsured woman who becomes pregnant will usually qualify for her state’s Medicaid program.
What is the Difference Between Medicare and Medicaid?
Given how complex our healthcare system is, it’s easy to mix up Medicare and Medicaid.
While they’re completely different programs, there can be some overlap between who gets coverage.
Let’s start with the differences on who qualifies.
Medicare is primarily for individuals over 65 years old. In order to qualify for Medicare, you must have been working and paying Medicare taxes for a minimum of 10 years.
However, people under 65 can qualify for Medicare in a variety of different ways.
If you’ve been on Social Security (i.e. have a disability) for at least two years, you can qualify for Medicare.
Furthermore, if you have Lou Gehrig’s disease (ALS) or End Stage Renal Disease (ESRD), you can usually qualify for Medicare right away with no waiting period.
While Medicaid is dependent on having low income, Medicare doesn’t have an income requirement.
As long as you’ve met one of the above criteria, you can qualify for Medicare regardless of your socioeconomic status.
Who Funds What?
Another big difference between the two programs is their source of funding.
Medicare is completely funded and operated by the federal government. This means, no matter where you are in the country, you’re going to get the exact same benefits across the board.
However, Medicaid is funded by both the state and federal governments. Moreover, each state controls how Medicaid is operated and how funds are distributed, so benefits can vary depending on where in the country you live.
Another major difference between Medicare and Medicaid is coverage of long-term care.
Medicare doesn’t cover long-term care. So coverage for something like a nursing home won’t be under Medicare.
However, Medicaid usually covers some types of long-term care, though this coverage is fairly limited.
While there are many differences between these types of insurance, there are some overlaps in terms of coverage.
Both Medicare and Medicaid cover hospitalizations, labs, medications, doctor visits, and radiology (X-rays).
How to Apply for Medicaid?
Applying for Medicaid is different than applying for private insurance .
When you apply for marketplace insurance, you must do it during a period called “open enrollment.”
This is to prevent something called adverse selection, which is when sick people sign up for health insurance, but healthy people don’t sign up.
This skews the overall risk of the medical industry and causes prices to go up, since insurance companies are now having to pay exclusively for higher-risk individuals.
Having a set open enrollment period is how the health industry can keep prices stable across the board.
That said, with Medicaid, there is no open enrollment period. Individuals or families may enroll at any time, as long as they’re eligible.
Currently, there are two ways to apply:
- Contact your state’s Medicaid agency. You can find their contact information at this website. Remember, you’re required to be a resident of the state where you apply.
- Fill out the online form on the HealthCare.gov insurance marketplace.
One important thing to remember is that most states require you to re-apply for Medicaid every year. If your state requires this, it might be a good idea to set annual reminders so you don’t forget.
Yes, understanding healthcare in the US can be a bit complicated.
However, with the abundance of information available online, it’s become much easier to understand programs like Medicaid, and how you can get covered if you qualify.
Here’s a quick cheat sheet:
- Medicaid is a program primarily for low-income individuals, while Medicare is for the elderly.
- Medicaid coverage and eligibility varies from state to state.
- Eligibility is primarily based on income, though certain individuals with higher medical needs may qualify.
Remember, you can visit Medicaid.gov for all of the information you’ll need, and if you have questions about medications and pharmacy coverage for your specific insurance plan, you can always reach out to us at email@example.com and we’ll be more than happy to help.