Eligibility for many government benefits programs is based on the applicant’s need or income. These income-based programs have established income or asset limits that apply, when determining whether you are qualified to receive benefits. Medicaid is one of those programs. You do not have to be “impoverished” in order to qualify, but your income must be low enough to meet the maximum asset threshold.
What type of program is Medicaid?
Medicaid is a federal program established to provide assistance to low income individuals and families in paying for necessary medical care. Medicaid, unlike Medicare, is available to individuals based on need. Medicare, on the other hand, is a federal health insurance program for the disabled and for people 65 years of age and older. Medicaid is not a reimbursement program. Instead, physicians, hospitals and other medical care providers (who are enrolled in the Medicaid program), are paid directly. Medicaid does not pay all medical expenses indiscriminately, and some recipients are still required to pay a portion of the expenses themselves.
How can I qualify for Medicaid?
Each state determines the specific qualifications for its own Medicaid program. However, most states provide coverage for adults with children below a certain income level, pregnant women, certain seniors and people with disabilities. The Affordable Care Act of 2010 established a national minimum eligibility level for Medicaid of 133% of the federal poverty level. This minimum became effective on January 1, 2014. So, the total income for a family of four would need to be below $31,720.50 a year.
You cannot simply give your assets away.
A dangerous misconception some people have is that you can give your assets away in order to be eligible for Medicaid. Medicaid agencies disapprove of people giving away their assets before applying for Medicaid, because those assets could have been used to pay for their own care. Not all transfers of property are improper — it depends on the timing. If you transfer any assets within five years of filing your application for Medicaid, your state Medicaid agency is likely to withhold your benefits for a period of time. This period of ineligibility is known as the “penalty period.” The length of the penalty period depends on the amount or value of the assets that were transferred.