What is Medicaid?
Medicaid is a health insurance program for people with low
income. It was created in 1965 as a joint federal-state
program to provide medical assistance to aged, disabled, or
blind individuals (or to needy, dependent children) who
could not otherwise afford the necessary medical care.
Who administers Medicaid?
Each state administers its own Medicaid programs based on
broad federal guidelines and regulations. Within these
guidelines, each state (1) determines its own eligibility
requirements, (2) prescribes the amount, duration, and types
of services, (3) chooses the rate of reimbursement for
services, and (4) oversees its own program.
How do you qualify for Medicaid?
Approximately 39 million people receive Medicaid benefits.
To qualify for Medicaid, you must meet two basic eligibility
requirements. First, you must be considered categorically
needy because you are blind, disabled, or elderly. Second,
you must be financially needy. This means that your income
and your assets must fall under a certain limit set by the
state in which you live.
How do you apply for Medicaid?
You can apply for Medicaid at your
state welfare office, public health department or state
social service agency.
What types of benefits are available?
Medicaid pays for a number of medical costs, including
hospital bills, physician services, home health care, and
long-term nursing home care. States may elect to provide
other services for which federal matching funds are
available. Some of the most frequently covered optional
services are clinic services, medical transportation,
services for the mentally retarded in intermediate care
facilities, prescribed drugs, optometrist services and
eyeglasses, occupational therapy, prosthetic devices, and
speech therapy. Check with your state's Medicaid
representative to see what coverage your state offers.
Medicaid and long-term nursing home
Over 60 percent of all nursing home residents receive
Medicaid benefits that help pay for their care. An aging
population and the increased cost of long-term care have
made Medicaid planning an important topic. If you're
interested in Medicaid planning, here are some things you
In years past, attorneys and financial
planners devised strategies for the middle class and people
of means to qualify for Medicaid by transferring funds to
family members and by establishing trusts. Consequently,
Congress tightened the Medicaid rules regarding the transfer
The Omnibus Reconciliation Act of 1993
makes qualifying for Medicaid more difficult for those
people who transfer their assets away without receiving fair
value in return. If you transfer assets away for less than
fair consideration within 36 months of your application for
Medicaid, the law creates a waiting period before you can
collect Medicaid benefits. Transfers into certain trusts
within 60 months of your Medicaid application also will also
cause a period of ineligibility.
However, it's still possible to plan for
long-term care and comply with the various Medicaid rules.
Trusts, transfers of the family home, purchase of exempt
assets, outright transfers under the "half-a-loaf
strategy," and the purchase of long-term care
insurance, among others, can be effective planning tools and
strategies for this purpose. For details, see your financial
adviser or an attorney experienced with Medicaid planning.
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information contained in this Web site is provided solely as a source of
general information and resource. It is a not a statement of
contract and coverage may not apply in all areas or circumstances. For a complete
description of coverages, always read the insurance policy, including