When it comes to helping those who have low incomes and asset levels pay for health care expenses, Medicaid is known as the national “safety net.” This government program – a combination of federal and state regulations – helps in paying the costs of those who are in various groups, including seniors, as well as those who have certain types of qualifying disabilities.
It is estimated that approximately one in five Medicare enrollees also receive some form of benefits from Medicaid. These individuals are officially referred to as being “dual eligibles” as they are eligible for benefits from both programs.
If an individual qualifies for full benefits from Medicaid, he or she will typically pay very little – or nothing at all – for their medical care. This is because Medicaid will pay their out of pocket expenses that are required from Medicare. In addition, Medicaid will provide more coverage than Medicare in certain instances, such as for extended stays in a skilled nursing home facility.
Also, Medicaid will pay other items that aren’t covered by Medicare as well, such as hearing aids and eyeglasses, as well as for long-term care that is received in a nursing home. In addition, being eligible for these services through Medicaid will typically automatically qualify a person for prescription drug coverage via Medicare Part D’s Extra Help program.
How Medicaid is Administered
Although Medicaid is partially regulated by the federal government, the program is administered by each individual state – and in turn, each of the States shares the expenses with the federal government. (In certain states, Medicaid goes by a different name, such as in California where it goes by the name of Medi-Cal).
Because of this, each of the states is allowed to have – and does have – differing rules for Medicaid eligibility. However, in general, a person will typically be required to show all of the following criteria in order to qualify for Medicaid benefits:
- A monthly income that is below the amount of their state’s poverty level
- Savings and assets that are under a certain dollar value
- Residency in the particular state
- United States citizenship or legal residency (i.e., a green card holder)
What is the Medicaid “Spend Down” Process?
In some states, there is a process whereby citizens who have income and / or assets that are above the financial limits for Medicaid qualification will spend down their resources in order to get their funds below the dollar amount levels so that they may qualify.
The states that run these spend down programs have a number of different rules for eligibility – although it is typically granted for only a certain time period. As an example, the spend down period may only last for six months at a time, after which a person may be required to start the process all over again.
This occurs because when a person is receiving benefits through Medicaid, their own medical expenses will usually decrease – generally to the point where they could lose their eligibility and need to run up more medical bills in order to qualify for the program all over again. This can, in turn, become a vicious circle of eligibility requirements.
Regardless, for those who have Medicaid via one of these spend down programs, most of your out of pocket Medicare expenses will be covered – at least for certain periods of time. And, once you are in the Extra Help program (if applicable), even if your Medicaid coverage runs out earlier, you can typically continue to receive the benefits from Extra Help until at least the end of the calendar year.
Going through the eligibility process for the Medicaid program can entail a fair amount of “red tape” – and it is entirely possible for some individuals who qualify one year to be disqualified the next. Therefore, it is important to keep up with what is required even after becoming eligible for the program and receiving benefits.
In addition, it may also be more difficult to locate doctors and other medical providers who accept Medicaid payment as versus those who accept other types of insurance. Overall, however, the program can provide a very viable last resort for those who have no other option for paying their necessary health care expenses.
In order to determine whether or not your state has a Medicaid spend-down program, you can contact your local Medicaid office. Or, alternatively, you can contact your local SHIP (State Health Insurance Program) office.
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