A Beginner’s Guide to State-by-State Medicaid

• A guide to Medicaid programs

• In this post
• What is Medicaid?
• Families planning senior care should understand the difference between Medicare and Medicaid. Both are government programs, but they work differently. They have different eligibility rules, cover different services, and are managed at different levels of government.
  
  Medicare covers people 65 and older, plus some younger people with disabilities or end-stage renal disease. It offers several types of coverage.
• What is covered by Medicaid?
  • Services covered by Medicaid in all states
  • Services covered by Medicaid in some states
  • Services not covered by Medicaid
  • Services covered by Medicaid under HCBS
• To qualify for Medicaid nursing home coverage, you must meet income and asset limits set by your state. States review the past five years of asset transfers to prevent people from giving away money just to become eligible. This "look-back" period is a standard part of the qualification process.
• Who is eligible for Medicaid?
  • Non-financial requirements for Medicaid eligibility
  • Financial requirements for Medicaid eligibility
  • Income limits by state for Medicaid eligibility
  • Resource and asset limits for Medicaid eligibility
• What counts as household income?
• What if your income exceeds the Medicaid limits?
  • a. The "medically needy" pathway
  • b. Qualified Income Trusts (QITs)
• When should you apply for Medicaid?
• Next steps
  • Find Medicaid planning attorneys
  • Finding senior living options
• Sources

A guide to Medicaid programs

Healthcare costs add up quickly. Prescription drugs, surgery, nursing home care—medical bills can overwhelm a family's finances fast.

Medicaid can cover most or all of these costs if you qualify. This article walks you through the rules and steps for getting Medicaid coverage.

Medicaid mixes federal and state law, and the rules vary by state. The system is also in transition, with states at different stages of a years-long overhaul of their Medicaid procedures.

This is genuinely complicated. To figure out the best path for your family, talk to a Medicaid planning attorney. It's similar to hiring a tax professional—except Medicaid planning is often more tangled than tax planning.

This article explains what to expect during Medicaid qualification and lists key questions to ask your Medicaid planner. Having this information upfront will save time and money when you meet with an attorney.

In this post

• What is Medicaid?
• What are the differences between Medicaid and Medicare?
• What is covered by Medicaid?
• What are the Medicaid requirements to qualify for nursing home coverage?
• Who is eligible for Medicaid?
• What counts as household income?
• What if your income exceeds the Medicaid limits?
• When should you apply for Medicaid?
• Next steps
• Sources

What is Medicaid?

Medicaid is a federal-state program that provides medical coverage to certain groups. Individual states administer the program.

What are the differences between Medicaid and Medicare?

Medicare and Medicaid sound similar but serve different purposes. Understanding the difference matters when you're planning care.

Medicare is a federal insurance program for people 65 and older, some younger people with disabilities, and people with end-stage renal disease. It's not based on income. Medicare has four parts: Part A (hospital care), Part B (doctor visits and outpatient care), Part C (private Medicare Advantage plans), and Part D (prescription drugs).

Medicaid is a joint federal-state program for low-income individuals and families. Eligibility depends on income and family size, and the rules vary by state. Medicaid covers services Medicare doesn't, including long-term nursing home care and at-home care.

In brief: Medicare is an age-based entitlement program funded through payroll taxes. Medicaid is income-based and funded jointly by federal and state governments. Medicaid often covers long-term care costs. Figure out which program fits your situation—or whether you qualify for both.

The table below shows the main differences between Medicaid and Medicare.

Medicaid

Medicare

Administered by state governments

Administered by the federal government

Eligibility based on income

Eligibility based on age and disabilities

Covers children, pregnant women, elderly people, and people with disabilities

Covers people over 65 and people with certain disabilities

Requires annual renewal

No renewal required

What is covered by Medicaid?

Medicaid pays for most medical expenses including prescription drugs, hospital stays, and nursing care. If you're covered by both Medicaid and Medicare ("dual eligible"), Medicare pays for your prescriptions instead of Medicaid.

Below is what Medicaid covers and doesn't cover.

Services covered by Medicaid in all states

• Physician services
• Family nurse practitioner services
• Dental services
• Hospital inpatient and outpatient services
• Medical diagnostic lab and X-ray services
• Nursing services for people aged 21 or above

Services covered by Medicaid in some states

• Prescription drug coverage
• Optometrist services and eyeglasses
• Prosthetic devices
• Home care for individuals eligible for nursing services

Services not covered by Medicaid

• Personal items such as clothing, grooming products, cosmetics
• Reading materials, TVs, radios, phones
• Flowers, plants, gifts
• Private rooms (unless medically necessary)
• Food not provided by the facility
• Special services or "extras" not included in the facility's Medicaid payment
• Special services or "extras" not included in the facility's Medicaid payment

Some states offer Home and Community Based Services (HCBS), a Medicaid program for elderly people outside nursing homes. HCBS coverage usually applies to certain disabilities and specific geographic regions.

Services covered by Medicaid under HCBS

• Adult day health services (medical, nursing, psychiatric, psychological, physical, occupational, and speech services)
• Personal care
• Habilitation
• Home health aide services
• Respite care services

Some states cover HCBS at assisted living facilities and nursing homes if the facility is Medicaid certified. Medicaid does not pay for room and board at assisted living facilities, but it does at nursing homes.

What are the Medicaid requirements to qualify for nursing home coverage?

Medicare covers nursing home care if all of these apply:

• A doctor has determined this care is medically necessary
• You were hospitalized for 3 or more consecutive days (not counting discharge day)
• You need skilled nursing care daily for the condition you were hospitalized for
• You are admitted to a nursing home within 30 days of hospital discharge

Who is eligible for Medicaid?

Medicaid eligibility has two categories: financial and non-financial requirements. Here are the key points.

Non-financial requirements for Medicaid eligibility

Generally, you must:

• Be a U.S. citizen or lawful permanent resident
• Live in the state where you're applying for benefits
• Meet age, pregnancy, or parenting requirements
• Meet "level-of-care" requirements depending on the benefits you're seeking

Financial requirements for Medicaid eligibility

Medicaid covers eligible children (under 19), pregnant women, people 65 and over, people with disabilities, and in some states, low-income adults. Each group has different financial requirements that vary by state.

You must have income and assets below limits set by your state. These limits range from about $235 to $4,784 or higher; some states have no limit at all. The lower the limit, the less money you can have and still qualify.

The table below shows income limits by state.

Income limits by state for Medicaid eligibility

[medicaid income eligibility 2021 – Income Limits]

Notes:

1. No income limit; all income except $35 goes toward cost of care.
2. Income must be less than the cost of nursing home care.
3. No income limit; all income except $50 goes toward cost of care.
4. No income limit; each spouse's income except $50 goes toward cost of care.
5. No income limit. Income above $62 goes toward cost of care.
6. No income limit. Income above $62 per spouse goes toward cost of care.
7. No income limit. Income above $1,157 goes toward cost of care.
8. No income limit. Income above $1,157 per spouse goes toward cost of care.
9. Income cannot exceed the cost of nursing home care.
10. No income limit; all income except $65 goes toward cost of care.
11. No income limit; contribution toward cost of care determined by monthly income.
12. No income limit; each spouse's contribution toward cost of care determined by monthly income.
13. Aging waiver: $1,073. New Choices waiver: $2,382.
14. Aging waiver: $1,073 per spouse. New Choices waiver: $2,382 per spouse.

Resource and asset limits for Medicaid eligibility

In addition to income limits, you must also have assets below your state's limit.

Net equity is the estimated market value of your assets minus any debts.

Most states exclude these assets from the Medicaid calculation:

• Your primary home up to about $603,000
• One vehicle of any value
• Household goods and personal items
• Funeral and burial funds up to $1,500
• Term life insurance policies
• Up to $2,000 in cash

Some states have exceptions to these rules.

What counts as household income?

For Medicaid, household income includes all income from all sources as defined by IRS rules. This covers all household members with a tax filing obligation, regardless of age or relationship to the applicant. A person living alone counts as a household.

What if your income exceeds the Medicaid limits?

Depending on your state, you may have two options to manage income and become eligible for Medicaid.

a. The "medically needy" pathway

This option looks at your income and medical care costs together. If your care costs will use up most of your income, you can qualify even if your income is above the limit.

b. Qualified Income Trusts (QITs)

Some states allow you to put any income above the limit into a trust. The money in the trust doesn't count toward the Medicaid limit, but it can only be used for medical costs and Medicaid premiums.

Some states provide a template for a QIT (also called a "Miller trust"), so you may not need an attorney to set it up.

When should you apply for Medicaid?

Timing matters. Apply too early and you may face a disqualification period where you can't reapply. Apply too late and you'll pay medical bills out of pocket. The best approach is to apply only once you're certain you qualify.

If you gave away money or assets within five years of applying, this can cause a disqualification period. The longer disqualification depends on how much you gave away.

A gift is any transfer of assets for less than fair market value. This includes checks written for holidays, birthdays, or school expenses. If you're married, this rule applies regardless of which spouse is applying or who gave the gift.

To figure out how long the disqualification lasts, divide the total gift amount by your state's average nursing home cost.

If you or your spouse have given away assets in the past five years, talk to a Medicaid attorney before applying. Applying too late costs money; applying too early costs time and eligibility.

Next steps

Find Medicaid planning attorneys

Life Care Planning Law Firms Association (LCPLFA): A nationwide network offering Medicaid planning, asset protection, and other elder law services. www.lcplfa.org

National Academy of Elder-Law Attorneys: An organization focused on elder law and Medicaid planning. Search by zip code and specialty at www.naela.org

Finding senior living options

Search for nursing homes, assisted living facilities, and home care by location. Compare prices and read reviews at www.seniorsite.org

Sources

1. https://www.benefits.gov/categories/Medicaid%20and%20Medicare
2. The federal poverty guidelines (also called HHS poverty guidelines) determine who qualifies for Medicaid, housing assistance, and nutrition programs. These guidelines are updated yearly to reflect economic changes. They help seniors access the care they need.
3. https://medicaid.alabama.gov/
4. [Unable to access external websites. Please provide text directly.]
5. https://www.healthearizonaplus.gov
6. [No text provided.]
7. http://www.coveredca.com/
8. https://coloradopeak.secure.force.com/
9. https://www.connect.ct.gov/access/jsp/access/Home.jsp
10. https://assist.dhss.delaware.gov/
11. http://dhs.dc.gov/node/117482
12. https://www.flmedicaidmanagedcare.com/
13. https://gateway.ga.gov/access/
14. [Unable to access external websites. Please provide text directly.]
15. [Unable to access external websites. Please provide text directly.]
16. Illinois' Home Care Program serves people at risk of premature institutionalization. It allows individuals to receive services at home instead of in a facility. The program is administered by the Illinois Department on Aging.
17. http://www.in.gov/medicaid/
18. https://dhs.iowa.gov/how-to-apply
19. https://www.kmap-state-ks.us/Public/Beneficiary/default.asp
20. [No text provided.]
21. The Louisiana Department of Health provides public health programs, oversees healthcare facilities, prevents disease, and offers health education. It works to ensure access to quality care and support healthier communities across the state.
22. [Unable to access external websites. Please provide text directly.]
23. [Unable to access external websites. Please provide text directly.]
24. https://www.mahealthconnector.org/start
25. [Unable to access external websites. Please provide text directly.]
26. https://www.mnsure.org/help/
27. https://www.access.ms.gov/
28. https://mydss.mo.gov/healthcare/apply
29. [No text provided.]
30. Nebraska's Medicaid program, run by the Department of Health and Human Services, helps low-income individuals and families access healthcare. For seniors and people with disabilities, it also covers long-term care services. Understanding Medicaid's long-term care rules is important for families planning senior care.
31. Nevada's Access Nevada portal helps seniors find and apply for benefits and support including healthcare, housing, and nutrition assistance. The online platform makes it easier for older adults to access the help they need.
32. New Hampshire's Bureau of Elderly and Adult Services operates Care Management Units statewide to serve elderly people, those with chronic illness, and people with disabilities. These units help people stay safely in their homes and communities as long as possible. CMUs are located throughout the state and offer a range of services.
33. [Unable to access external websites. Please provide text directly.]
34. https://www.yes.state.nm.us/yesnm/home/index
35. https://nystateofhealth.ny.gov/
36. [Unable to access external websites. Please provide text directly.]
37. http://www.nd.gov/dhs/services/medicalserv/medicaid/apply.html
38. https://medicaid.ohio.gov/wps/portal/gov/medicaid/
39. Oklahoma's Department of Human Services administers the SoonerCare program, which is the state's Medicaid program. SoonerCare provides comprehensive health coverage including prescription drugs, mental health services, and long-term care.
40. [Unable to access external websites. Please provide text directly.]
41. [No text provided.]
42. [Unable to access external websites. Please provide text directly.]
43. https://www.scdhhs.gov/Getting-Started
44. https://dss.sd.gov/medicaid/
45. https://www.tn.gov/tenncare.html
46. Texas Medicaid and CHIP (Children's Health Insurance Program) provide health coverage to millions of Texans. Medicaid covers low-income adults, children, pregnant women, seniors, and people with disabilities. CHIP covers children in families who earn too much for Medicaid but can't afford private insurance. Both programs are administered by the Texas Health and Human Services Commission and cover doctor visits, hospital stays, prescription drugs, and preventive care.
47. The Utah Medicaid program provides medical care to eligible low-income residents. It is administered by the Utah Department of Health and Human Services and operates under federal and state law. Medicaid providers must meet enrollment requirements and follow all program policies.
48. Medicaid is a federal-state program providing health coverage to millions of low-income Americans. It covers doctor visits, long-term care, mental health services, and prescription drugs.
49. https://commonhelp.virginia.gov/access/
50. Washington State's Apple Health is the state Medicaid program. It provides health coverage to eligible low-income residents, including many seniors. Apple Health covers medical care, prescriptions, and long-term care services like nursing home care, assisted living, and in-home care. Understanding how the program works helps families ensure their loved ones get necessary care without high costs.
51. https://dhhr.wv.gov/bms/Pages/default.aspx
52. https://access.wisconsin.gov/
53. Wyoming Medicaid provides healthcare to eligible low-income individuals and families. It covers medical care, prescription drugs, and long-term care services for people who cannot otherwise afford them. Funded jointly by federal and state government, the program helps improve health outcomes for Wyoming's most vulnerable residents.