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Medicaid - Eligibility

Medicaid does not provide medical assistance for all poor persons. Even under the broadest provisions of the Federal statute, Medicaid does not provide health care services even for very poor persons unless they are in one of the groups designated below. And low income is only one test for Medicaid eligibility for those within these groups; their resources also are tested against threshold levels (as determined by each State within Federal guidelines).

States generally have broad discretion in determining which groups their Medicaid programs will cover and the financial criteria for Medicaid eligibility. To be eligible for Federal funds, however, States are required to provide Medicaid coverage for certain individuals who receive Federally assisted income-maintenance payments, as well as for related groups not receiving cash payments. In addition to the Medicaid program, most States have additional "State-only" programs to provide medical assistance for specified poor persons who do not qualify for Medicaid. Federal funds are not provided for State-only programs.

The following list displays the mandatory Medicaid "categorically needy" eligibility groups for which Federal matching funds are provided:

   Individuals are generally eligible for Medicaid if they met the requirements for the AFDC program that were in effect in their State on July 16, 1996, or-- at State option -- more liberal criteria;

   Children under age six whose family income is at or below 133% of the Federal poverty level (FPL);

   Pregnant women whose family income is below 133% of the FPL (services to women are limited to: those related to pregnancy, complications of pregnancy, delivery and postpartum care);

   Supplemental Security Income (SSI) recipients in most States (some States use more restrictive Medicaid eligibility requirements that pre-date SSI);

   Recipients of adoption or foster care assistance under Title IV of the Social Security Act;

   Special protected groups (typically individuals who lose their cash assistance due to earnings from work or from increased Social Security benefits, but who may keep Medicaid for a period of time);

   All children born after September 30, 1983 who are under age 19, in families with incomes at or below the FPL. (This phased in coverage, so that by the year 2002, all such poor children under age 19 were covered); and

   Certain Medicare beneficiaries (described later).

States also have the option of providing Medicaid coverage for other "categorically related" groups. These optional groups share the characteristics of the mandatory groups (that is, they fall within defined categories), but the eligibility criteria are somewhat more liberally defined. The broadest optional groups for which States will receive Federal matching funds for coverage under the Medicaid program include:

   Infants up to age one and pregnant women not covered under the mandatory whose family income is no more than 185% of the FPL (the percentage amount is set by each State);

   Children under age 21 who met what were the AFDC income and resources requirements in effect in their State on July 16, 1996, (even though they do not meet the mandatory eligibility requirements);

   Institutionalized individuals eligible under a "special income level" (the amount is set by each State --up to 300% of the SSI Federal benefits rate);

   Individuals who would be eligible if institutionalized, but who are receiving care under home and community-based services (HCBS) waivers;

   Certain aged, blind or disabled adults who have incomes above those requiring mandatory coverage, but below the FPL;

   Recipients of State supplementary income payments;

   Certain working and disabled persons with family income less than 250% of FPL who would qualify for SSI if they did not work;

   TB-infected persons who would be financially eligible for Medicaid at the SSI income level if they were within a Medicaid-covered category (however, coverage is limited to TB-related ambulatory services and TB drugs);

   Certain uninsured or low-income women who are screened for breast or cervical cancer through a program administered by the Centers for Disease Control. The Breast and Cervical Cancer Prevention and Treatment Act of 2000 (Public Law 106-354) provides these women with medical assistance and follow-up diagnostic services through Medicaid.

   "Optional targeted low-income children" included within the State Children's Health Insurance Program (SCHIP) established by the Balanced Budget Act of 1997 (BBA); and

   "Medically needy" persons (described below).

The Medically Needy (MN) program allows States the option to extend Medicaid eligibility to additional persons. These persons would be eligible for Medicaid under one of the mandatory or optional groups, except that their income and/or resources are above the eligibility level set by their State. Persons may qualify immediately, or may "spend-down" by incurring medical expenses that reduce their income to or below their State's MN income level.

Medicaid eligibility and benefit provisions for the medically needy Medicaid program do not have to be as extensive as the categorically needy program, and may be quite restrictive in rules as to who is covered and/or as to what services are offered. Federal matching funds are available for MN programs. However, if a State elects to have any MN program, there are Federal requirements that certain groups and certain services must be included. Children under age 19 and pregnant women who are medically needy must be covered; and prenatal and delivery care for pregnant women, and ambulatory care for children must be provided. A State may elect to provide MN eligibility to certain additional groups, and may elect to provide certain additional services within its MN program. As of August 2002, 36 States elected to have a MN program, and provided at least some MN services for at least some MN recipients. All remaining States utilize the "special income level" option (above) to extend Medicaid to the "near poor" in medical institutional settings.

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104-193) --known as the "welfare reform" bill -- made restrictive changes regarding eligibility for Supplemental Security Income (SSI) coverage that impacted on the Medicaid program. The new law may be significant for certain aliens' Medicaid coverage. For most legal resident aliens and other qualified aliens who entered the United States on or after August 22, 1996, Medicaid is barred for five years. Medicaid for most aliens entering before that date is a State option, as is coverage after the five-year ban, except for emergency services. For aliens who lose SSI benefits because of new restrictions regarding SSI coverage, Medicaid can continue, except for emergency care, only if these persons can be covered for Medicaid under some other eligibility status. Although a number of disabled children lost SSI as a result of changes to the P. L. 104-193, their continued eligibility for Medicaid was assured by Public Law 105-33, the Balanced Budget Act of 1997 (the BBA).

In addition, welfare reform repealed the open-ended Federal entitlement program known as Aid to Families with Dependent Children (AFDC), and replaced it with Temporary Assistance for Needy Families (TANF), which provides grants to States to be spent on time-limited cash assistance. TANF limits a family's lifetime cash welfare benefits to a maximum of five years, and permits States to impose a wide range of other restrictions as well -- in particular, requirements related to employment. However, the impact on Medicaid eligibility is not expected to be significant. Under welfare reform, persons who would have been eligible for AFDC under the AFDC requirements in effect on July 16, 1996, generally will still be eligible for Medicaid. Although most persons covered by TANF will receive Medicaid, the law does not so require.

Title XXI of the Social Security Act, known as the State Children's Health Insurance Program (SCHIP), is a program initiated by the Balanced Budget Act of 1997 (the BBA). In addition to allowing States to craft or expand an existing State insurance program, SCHIP provides Federal funds for States to expand Medicaid eligibility to include more children who are currently uninsured. With certain exceptions, these are low-income children who would not qualify for Medicaid based on the plan that was in effect on April 15, 1997. Funds from SCHIP also may be used for providing medical assistance to children during a presumptive eligibility period for Medicaid. This is one of several options for States to select for providing health care coverage for more children, as prescribed within the BBA's Title XXI program.

Medicaid coverage may begin as early as the third month prior to application-- if the person would have been eligible for Medicaid had he applied during that time. Medicaid coverage generally stops at the end of the month in which a person no longer meets the criteria of any Medicaid eligibility group. The BBA allows States to provide 12 months of continuous Medicaid coverage (without reevaluation) for eligible children under the age of 19.

The Ticket to Work and Work Incentives Improvement Act of 1999 (Public Law 106-170) provides or continues Medicaid coverage to certain disabled beneficiaries who work despite their disability. Those with higher incomes may pay a sliding scale premium based on income.

See these topics for additional information:

   Medicaid - Overview

   Medicaid - Scope of Services

   Medicaid - Amount and Duration of Services

   Medicaid - Payment for Services

   Medicaid - Data Summary and Trends

   Relationship of Medicaid and Medicare


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