Medicaid Your Coverage Options

Medicaid: Why it matters to all of us

Written by Diane Archer

Medicaid, with “aid” at the end, is a federal-state insurance program established to help individuals and families living in or near poverty.  But, high health care costs, particularly nursing home care, can very quickly push relatively comfortable middle class households into poverty. Consequently, Medicaid is a lifeline for tens of millions of people in the U.S., including millions of older people needing nursing home care.

Who qualifies for Medicaid? One in five Americans is on Medicaid at any given time, according to the Kaiser Family Foundation. Individuals on Medicaid might have lost a job, along with their insurance, or need help paying for Medicare premiums or copays. Or, they might need long-term services and supports, such as nursing home care or home care, which Medicaid generally pays for.

There is a one in three chance that a 65 year-old today will need nursing home care at some point. Because nursing home care typically costs $100,000 a year, Medicaid ends up picking up the cost of nursing home care for 75 percent of older people.

All told, about 63 million people rely on Medicaid for coverage at any given time in the year, including millions with incomes above the Medicaid limit who qualify after spending so much on care that they are left with little income and minimal assets.

What is the state’s role in determining who qualifies? Each state decides the level of poverty that qualifies an individual or a household for Medicaid and the level of benefits provided, although the federal government provides certain parameters and pays for a large chunk of the cost. Today, the Affordable Care Act incents states to offer Medicaid to anyone whose income is up to 138 percent of the federal poverty level, including immigrants who have lived in the US legally for five years or more.  Many states allow people to “spend down” to Medicaid, essentially paying out of pocket for care until their income and assets meet Medicaid eligibility standards.

How many older adults and people with disabilities have Medicaid? About one in four people with Medicaid are over 65 or have a disability; almost two-thirds of Medicaid spending goes towards covering their care.  The 16 million older adults and people with disabilities with Medicaid tend to have complex and costly conditions. About 11 million of them also have Medicare and rely on Medicaid as their secondary insurer.

How efficient is Medicaid? Medicaid’s cost increases have been much lower than private insurance because the government sets prices for Medicaid services. People can receive those services from private doctors and hospitals as well as public hospitals.The Kaiser Family Foundation has a quiz to help you better understand Medicaid.  You can test your knowledge and learn even more by clicking here.

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