Medicaid Basics
What Is Medicaid?
Medicaid is a federal and state-funded program that provides healthcare coverage to individuals and families with limited income and resources. It supports:
Seniors (65 and older)
Individuals with disabilities or blindness
Those in need of long-term care assistance
What Does Medicaid Cover for Long-Term Care?
Medicaid plays a crucial role in covering long-term care (LTC) for individuals who need ongoing assistance with daily activities due to aging, chronic illness, or disability. Unlike Medicare, which offers limited coverage for long-term care, Medicaid is the primary source of funding for services such as nursing home care, assisted living, and in-home care for eligible individuals. Because long-term care can be costly, Medicaid helps cover expenses for those who meet financial and medical eligibility requirements.
Each state has its own Medicaid long-term care programs, which may include Home and Community-Based Services (HCBS) that allow individuals to receive care at home or in a community setting rather than in a nursing facility. For many families, Medicaid provides essential support, ensuring that their loved ones receive the care they need without depleting their life savings.
Who Qualifies for Medicaid?
Long-Term Care (LTC) Medicaid is a government program that helps cover the cost of nursing home care, assisted living, and home- and community-based services for eligible individuals. To qualify, applicants must meet both financial and non-financial requirements.
Non-Financial Requirements
To qualify for LTC Medicaid, applicants must also meet the following non-financial criteria:
- Age, Disability, or Medical Need – Applicants must be:
- Aged 65 or older
- Diagnosed with a qualifying disability
- Require a nursing home level of care as determined by a state assessment
- Residency and Citizenship –
- Must be a U.S. citizen or qualified legal resident
- Must be a resident of the state in which they apply
Functional Eligibility – Applicants must demonstrate a need for assistance with Activities of Daily Living (ADLs) such as bathing, dressing, eating, mobility, and toileting.
Medicaid Financial Requirements
Income Limits – Applicants must have limited income, typically below a certain threshold set by the state. Some states use a “medically needy” pathway, allowing individuals with high medical expenses to qualify even if their income exceeds the limit.
Asset Limits – LTC Medicaid has strict asset limits, typically $2,000 for an individual (though this varies by state). Some assets are considered non-countable, including:
- Primary residence (if equity is below a certain limit and the applicant intends to return home)
- One vehicle
- Personal belongings and household goods
- Prepaid funeral arrangements
- Certain life insurance policies with low cash value
Spousal Impoverishment Protections – When one spouse applies for Medicaid, the non-applicant spouse (community spouse) is allowed to retain a portion of income and assets through Community Spouse Resource Allowance (CSRA) and Minimum Monthly Maintenance Needs Allowance (MMMNA) to prevent financial hardship.
Look-Back Period – Medicaid reviews financial transactions for five years (or 2.5 years for some home- and community-based waivers) to prevent applicants from transferring assets to qualify. Penalties apply if asset transfers violate Medicaid rules.
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