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Medicaid

MEDICAID IS A MEANS-TESTED program that provides hospital and medical coverage for those with low incomes and limited resources. It’s funded by the federal and state governments, but the program is run by the states. Each state has its own rules about who is eligible and what is covered under Medicaid. The program provides comprehensive medical coverage—in some instances, more comprehensive than Medicare. Depending on the state, those who are eligible for Medicaid may be charged modest amounts for some services. A majority of Medicaid recipients are in managed-care programs run by private health plans.

While Medicaid is means-tested, income hasn’t historically been the sole criteria for eligibility. You also needed to fall into certain categories, such as children in low-income families, the parents of these children, pregnant women, certain people with disabilities and low-income seniors.

Under the 2010 Affordable Care Act, Medicaid was greatly expanded so that states could offer coverage to those under age 65 with incomes at or below 138% of the federal poverty level. But fearful that the expansion would eventually be a burden on state budgets, 19 states have declined federal financing to expand Medicaid coverage. Pundits are expecting major changes to this part of the Affordable Care Act in 2017.

In 2012, 22% of Medicaid recipients were seniors or those with disabilities, but they accounted for 64% of Medicaid spending, according to the Center on Budget and Policy Priorities. Indeed, Medicaid covers more than 60% of all nursing home residents. But qualifying for a Medicaid-paid nursing home involves meeting strict financial criteria—and will likely mean your heirs will receive little or nothing.

Next: Nursing Home Costs

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