Medicaid Frequently Asked Questions
Frequently Asked Questions
Question: Who is covered by Medicaid?
Answer: Medicaid finances low-income and high-need populations, including health and long-term care services for children, pregnant women, adults in low-income working families, the elderly, and the disabled. Currently, low-income children can qualify for Medicaid or the Children’s Health Insurance Program; however eligibility for low-income parents is more limited and varies by state.
Under health reform, changes will result in who is covered. The new law will simplify the under-65 population by eliminating category criteria and establishing a national income eligibility floor at 133% of the poverty level.
According to Medicaid: A Primer, Kaiser Family Foundation (2010), Medicaid covers 45% of all poor Americans whose income falls below the federal poverty level (FPL), which in 2008 for a family of four was $22,025. Medicaid also covers more than ¼ of Americans, those between 100% and 200% FPL.
To qualify for Medicaid, a person must meet financial criteria and belong to a group that is categorically eligible for the program. These mandatory groups are:
- Pregnant women and children under age 6 with family income below 133% FPL
- Children age 6-18 below 100% FPL
- Parents below states’ July 1996 welfare eligibility levels (often below 50% FPL)
- Elderly and persons with disabilities who receive Supplemental Security Income (SSI), a program for which income eligibility equates to 75% FPL for an individual
Under the new health reform law, nearly everyone under age 65, regardless of category, with income below a national floor will be eligible for Medicaid. In 2014, the new law ends the exclusion of these adults and will expand Medicaid eligibility nationally to adults under age 65 up to 133% FPL.
States may expand Medicaid eligibility to cover additional optional groups. These groups are:
- Pregnant women, children, and parents with income exceeding the mandatory thresholds
- Elderly and disabled individuals up to 100% FPL
- Working disabled individuals up to 250% FPL
- Persons residing in nursing facilities with income below 300% of the SSI standard
- Individuals who would be eligible if institutionalized but are receiving care under home and community-based services waivers
- Medically needy individuals who cannot meet the financial criteria but have high health expenses and who belong to one of the categorically eligible groups
Immigrants who have entered the U.S. illegally cannot qualify for basic Medicaid benefits, although they are eligible for Medicaid coverage for emergency medical care (if they meet all other financial and non-financial requirements). Most categories of immigrants who are legally residing in the U.S. and who meet all other financial and non-financial requirements are eligible for Medicaid coverage for emergency care, but, depending on the year in which they entered the country, they may or may not be eligible for the full range of Medicaid services.
Question: What services does Medicaid cover?
Answer: State Medicaid programs provide a range of mandatory services, but can also provide an array of “optional” services. Children are entitled to all medically necessary Medicaid benefits, whether mandatory or optional under federal law also known as Early and Periodic Screening, Diagnostic and Treatment (EPSDT) services. States are not able to vary benefits by geographic area or by eligibility category without a Federally-approved waiver.
According to Medicaid: A Primer, Kaiser Family Foundation (2010), state Medicaid programs are generally required to cover:
- Physicians' services
- Hospital services (inpatient and outpatient)
- Laboratory and x-ray services
- Early and periodic screening, diagnostic, and treatment (EPSDT) services for
individuals under 21
- Federally-qualified health center and rural health clinic services
- Family planning services and supplies
- Pediatric and family nurse practitioner services
- Nurse midwife services
- Nursing facility services for individuals 21 and older
- Home health care for persons eligible for nursing facility services
- Transportation services
Commonly covered optional services:
- Prescription drugs
- Clinic services
- Care furnished by other licensed
practitioners
- Dental services and dentures
- Prosthetic devices, eyeglasses, and
durable medical equipment
- Rehabilitation and other therapies
- Case management
- Intermediate care facility for individuals
with mental retardation (ICF/MR)
services
- Home and community‐based services
(by waiver)
- Inpatient psychiatric services for
individuals under age 21
- Respiratory care services for ventilator dependent
individuals
- Personal care services
- Hospice services
- Nursing facility services for
individuals under age 21
Question: What are some rural implications of the Medicaid program?
Answer: As with Medicare, the demographics of rural America explain much of the significance of the Medicaid program for rural residents and providers. According to Medicaid and Its Importance to Rural Health, Rural Policy Research Institute (2006), rural populations experience higher rates of poverty than their urban counterparts, are less likely to have health insurance, have a greater proportion of elderly residents, and are more likely to have children in the household. Any changes in Medicaid benefits or eligibility that target children, elderly, or the disabled will therefore significantly affect rural communities.
In addition to Medicaid’s importance to rural residents in terms of providing access to care, the program plays a major role in the financial viability of rural providers. As with Medicare, some rural provider types, such as small independent pharmacies, are more dependent on Medicaid reimbursement than their urban counterparts. Because rural health care is heavily dependent on Medicaid, any change in Medicaid payments to providers (because of a change in eligibility, covered services or provider payment reductions) could have a disproportionate impact on the financial stability of rural providers. Rural safety-net providers such as small rural hospitals, Federally Qualified Health Centers (FQHCs), Rural Health Clinics (RHCs), and Critical Access Hospitals (CAHs) tend to operate on small financial margins and are therefore extremely susceptible to changes in reimbursement.
According to
The Patient Protection and Affordable Care Act of 2010: Impacts on Rural People, Places, and Providers: A First Look, RUPRI, (2010), provisions in the ACA will have an impact on rural areas. Changes in health insurance coverage, Medicare and Medicaid payment, Public Health, Healthcare Workforce, Long-Term Care, and changes in delivery systems should occur.
In 2010, some changes that were implemented were: including eligibility for coverage for children as dependents in family plans up to age 26, creation of high-risk pools for persons with pre-existing health conditions, and extension of tax credits and subsidies to small businesses and their employees.
After 2014, expansions of coverage through Medicaid and health insurance exchanges, along with the use of subsidies and tax credits will occur.
Rural primary care physicians will benefit from Geographic Practice Cost Indices (GPCIs) adjustments that will reduce geographic practice expense disparities. Rural hospitals should have less charity care and fewer bad debts due to the decline in the uninsured. The establishment of a Community Health Centers (CHC) fund to expand and sustain federal investments by appropriating an additional $700 million in FY 2011 that increases to $2.9 billion in FY 2015. New payment systems are expected, along with the establishment of the Independent Payment Advisory Board (IPAB).
Question: What are some future challenges affecting Medicaid?
Answer: According to Medicaid: A Primer, Kaiser Family Foundation, (2010), under the new law, starting in 2014, most individuals will be required to obtain health coverage. Access to affordable health coverage will be improved. Medicaid eligibility for people under age 65 will be based solely on income. Categorical restrictions will be abolished and coverage will be extended to millions more low-income people. Enrollment will be simplified, and improvements will be made to access of care.
16 million more people are expected to gain Medicaid or CHIP coverage by 2019 due to the expansion of Medicaid eligibility and increased participation. The Congressional Budget Office estimates that the federal government will finance about 96% of the coverage increases associated with health care reform between 2010 and 2019 ($434 billion), and states will contribute 4% ($20 billion).
With the passage of the Deficit Reduction Act of 2005 (DRA), Medicaid spending is expected to decline. The DRA gives states new flexibility to limit benefits and impose premiums and cost sharing. This new law provides options focused on expanding community based long-term care, requires states to make changes to the asset transfer rules that affect eligibility for Medicaid nursing home services, and requires states to obtain proof of citizenship for Medicaid enrollees. Beyond this, some states are pursuing major and fundamental program reforms through Medicaid waivers.
The aging of the population can also be expected to increase demands on Medicaid, since the health care needs and costs for the elderly and people with disabilities are the most costly. Moreover, Medicaid covers long-term care for low-income Medicare beneficiaries, and is the single largest source of financing for long-term care. As demand increases, long-term care costs can be expected to rise.
Sources
Credits
Developed by: Michelle Goodman, Office of Rural Health Policy
Please send comments to: Mary Reinertson-Sand, mary@raconline.org
Last revised 03/07/2011
