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Medicaid was enacted in 1965, in the same legislation that created the Medicare program, the Social Security Amendments of 1965 (P.L. 89-97). It grew out of and replaced two earlier programs of Federal grants to States that provided medical care to welfare recipients and the aged. Medicaid is a "means-tested" entitlement program.
In general, this means that a Medicaid enrollee must have both a low income and a low level of assets, although the minimum financial thresholds vary depending on the basis for an enrollee's eligibility.
To many, Medicaid is an enigma. The program's complexity surrounding who is eligible, what services are paid for, and how those services are reimbursed and delivered is one source of this confusion. Variability across State Medicaid programs is the rule, not the exception. Within broad statutory limits, states have the flexibility to administer the Medicaid program and determine its scope. Partly as a result, the program's rules are complex, and it can be difficult to generalize about the types of enrollees who are covered, the benefits that are offered, and the cost sharing that is required. States may choose to make additional groups of people eligible (such as individuals with high medical expenses who have "spent down" their assets) or to provide additional benefits (such as coverage for prescription drugs and dental services) and have exercised those options to varying degrees. Moreover, states often seek and receive federal waivers that allow them to provide benefits and cover groups that would otherwise be excluded under Medicaid. For example, TennCare is a waiver program.
Although the elderly and disabled constitute about one-quarter of Medicaid's enrollees, they account for two thirds of the program's spending. Overall, one-third of Medicaid's spending in 2006 was for long-term care, which includes nursing home services, home health care, and other medical and social services for people whose disabilities prevent them from living independently.
About 45 percent of Medicaid beneficiaries are enrolled in managed care plans that accept a capitated payment (a fixed amount per enrollee) for providing a comprehensive set of benefits. Those arrangements are more common for families and children, although some states also enroll the elderly and the disabled. About 15 percent of beneficiaries are enrolled in an arrangement that provides what is termed primary care case management, in which enrollees select (or are assigned) a primary care physician or group practice that is paid an additional fee for overseeing and coordinating their care.
In general terms, an individual must be categorically eligible, medically eligible AND financially eligible to receive Medicaid. Categorical eligibility includes technical eligibility (e.g., a U.S. citizen or legal alien). It also described the various "classes of assistance" under the Medicaid program (e.g., pregnant women, impoverished children, nursing home residents). Medical eligibility is usually what is sounds like - that is, your doctor says you have a medical need. More and more, though, States are imposing additional requirements such as the need for daily care as opposed to intermittent care. Financial need includes both an income and asset component and is different for each class of assistance.
Eligibility for the Aged Persons with Disabilities
Persons who qualify for Supplemental Security Income (SSI)
With one important exception, States are required to provide Medicaid coverage to recipients of SSI. SSI, authorized under Title XVI of the Social Security Act, is a means-tested cash assistance program for aged, blind, and disabled individuals whose income falls below the Federal maximum monthly SSI benefit and whose resources are limited. To qualify for SSI, a person must satisfy the program criteria for age or disability and meet certain citizenship or United States residency requirements. Eligibility for SSI is restricted to otherwise qualified individuals whose resources do not exceed $2,000 for an individual and $3,000 for a couple; certain resources, such as a person's home, are exempt. Income cannot exceed the maximum Federal SSI benefit rate (adjusted annually). The SSI benefit rate is approximately 74 percent of federal poverty level. Both Georgia and Tennessee are "SSI States."
The major exception to Medicaid coverage of SSI recipients is in States that exercise the so-called "209(b)" option described in Section 209(b) of the Social Security Amendments of 1972 (P.L. 92-603). These States may use income, resource, and disability standards that are no more restrictive than those in place on January 1, 1972. As of 2001, there were 11 Section 209(b) States, including Connecticut, Illinois, Hawaii, Indiana, Minnesota, Missouri, New Hampshire, North Dakota, Ohio, Oklahoma, and Virginia. Each of these has at least one eligibility standard that is more restrictive than current SSI standards and some have certain standards that are more liberal. States that use more restrictive eligibility rules under Section 209(b) must also allow applicants to deduct medical expenses from their income when determining financial eligibility for Medicaid. This process is sometimes referred to as "spend-down."
Coverage for institutionalized individuals and related groups under the special income rule
States may extend Medicaid to certain individuals with incomes too high to qualify for SSI, and who are eligible for nursing facility or other institutional care. Under the special income rule, also referred to as "the 300 percent rule," such persons must (1) require care provided by a nursing home or other medical institution for no fewer than 30 consecutive days, (2) meet the resource standard determined by the State, and (3) have income that does not exceed a specified level - no greater than 300 percent of the maximum SSI payment applicable to a person living at home. States may use a level that is lower than the maximum of 300 percent of SSI.
Since 1993 (OBRA 93), States that use only the special income rule for institutional eligibility, and do not use the medically needy option (described below), must allow applicants to place income in excess of the special income level in a special trust, often called a Miller Trust, and receive Medicaid coverage for their care. Following the individual's death, the State becomes the beneficiary of amounts in the trust.
Links:
Medicaid - Medical Need
Medicaid - Income Eligibility
Medicaid - Asset Eligibility
Medicaid Planning
Medicaid Planning: Frequently Asked Questions
Qualified Income ("Miller") Trusts
Georgia Medicaid Manual
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