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Can my income affect my elderly parent’s Medicaid benefits?

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The world of government-managed health insurance coverage can be tough for anyone to navigate. Don’t hesitate to contact MedicareInsurance.com via our live chat feature or by phone at (800) 950-0608 today to further explore options that may be available in your parents’ area!

Just the Essentials…

  • Medicaid is a health insurance program that is jointly managed by both the U.S. federal government and individual state governments. It is designed for specific classes of low-income individuals.

  • There are many factors that may affect your parents’ eligibility for Medicaid, including household income, individual income, and Medicare eligibility.

  • In some circumstances, it is possible for your parents to qualify for Medicaid coverage even if they do not meet the income limits imposed by their state.

  • Medicaid and Medicare can sometimes work together to provide coverage. Individuals who qualify for both programs are considered to be dually eligible.

What is Medicaid and how does income affect eligibility?

Medicaid is a health insurance option that is jointly managed by both the U.S. federal government and individual state governments. Medicaid provides crucial health care coverage for seniors as well as those with certain disabilities, pregnant women, and  other low-income individuals under 65. 

Eligibility requirements for Medicaid vary depending on the state, but generally speaking, receiving Medicaid mostly depends on income. Let’s discuss how your parents’ income may affect their eligibility for Medicaid benefits.

What is your parents’ household income?

One of the primary factors that may affect your parents’ Medicaid benefits is their household income. With regard to health insurance, a household is defined as:

  • The tax filer
  • The tax filer’s legal spouse
  • Individuals who are included as tax dependents on your tax form

Depending on the state you live in, a household may be defined slightly differently. Generally speaking, if your parents are listed as tax dependents, you can claim them as part of your household. If they are not tax dependents, however, then they should not be included as part of your household.

Your local Medicaid office can answer any additional questions you may have about how households are defined by your state.

What should I know about Medicaid eligibility?

Medicaid serves millions of seniors each year and provides health coverage as well as secondary insurance coverage for people who already have Medicare. For seniors, Medicaid primarily considers earned and unearned income (including wages and Social Security payments) when determining an individual’s eligibility

One way seniors qualify for Medicaid is by exhausting their financial resources and meeting the specific income and asset limits for their state. These assets may include secondary properties or land, checking and savings accounts, retirement accounts, secondary vehicles, investments, and vacation homes. 

Assets are usually divided into exempt and non-exempt categories. Exempt assets include your parent’s home and primary vehicle, while non-exempt assets include investment accounts, and annuities. Non-exempt assets typically count towards income limits for Medicaid.

What conditions may qualify my parents for Medicaid even if they do not meet the income limit?

When income and asset limits are exceeded, Medicaid can still be granted to beneficiaries with certain conditions or circumstances. There are three types of programs your parent could qualify for depending on different health situations:

Aged, Blind, and Disabled (ABD) Medicaid

The ABD program covers a range of healthcare services like hospital and doctor visits. It also helps with Medicare-cost sharing. To qualify, one must demonstrate that receiving at-home care will not cost more than receiving care in an institution. If your parents require long-term care, this may not be the right program for them. 

If your parent’s income is higher than the state-specific ABD Medicare guidelines, it may be wise for them to apply anyway. This is due to several factors:

  • Income limits for Medicaid are higher if your parents are married or if there are more than two people in the household.
  • Certain types of income or assets do not count against eligibility limits, including the amount paid for healthcare premiums.
  • $65 worth of earned monthly income isn’t counted 
  • Half of the total earned monthly income, ignoring the first $65, is not counted against limits.

Medicaid Home and Community-Based Service (HCBS) Waiver Programs

The HCBS program is designed to help your parents stay at home and continue living in their community. Under HCBS, your parents may receive homemaker services, case management, personal care, and respite care. These waivers allow states to disregard normal Medicaid program eligibility requirements such as:

  • Statewide Eligibility Standards – Waivers can target certain areas of the state where the need is greatest, or where certain types of providers are available.
  • Comparability – Waivers can target groups of people or diagnoses, such as the elderly or the intellectually disabled, when those groups are at risk of institutionalization.
  • Income and Resource Rules – Waivers can grant eligibility to those exceeding income and asset limits when those individuals would otherwise be eligible in an institutional setting.

Institutional Medicaid

The Institutional Medicaid program is designed for seniors who are in a nursing home or need nursing home care. It covers the cost of a nursing home, including room and board, therapy, and skilled nursing services. States assess Institutional Medicaid eligibility based on two main factors:

  • Ability to Function – Measured as need for assistance when performing activities of daily living such as bathing, eating, dressing and toileting,
  • Income and Assets – Higher limits may be set for those who require long-term or nursing care compared to other Medicaid programs, making financial eligibility easier to meet.

Can Medicaid and Medicare work together?

Some states offer a Medicaid Spend-Down program for Medicare beneficiaries who are medically needy. The purpose of this program is to help seniors deduct health care costs and medical expenses from their income in order to meet Medicaid income requirements in their state. 

When ineligible for full Medicaid, other solutions for seeking state help to pay for Medicare premiums come through the four main Medicare Savings Programs (MSPs). These programs require that members:

  • Already have, or are eligible to have, Medicare Part A
  • Have their monthly income and assets assessed over time, with asset limits set at $7,860 for an individual and $11,800 for a married couple. 

There are some scenarios where asset limits vary. Primarily, this occurs only when one is attempting to qualify for the Qualified Disabled and Working Individuals (QDWI) program. These limits are explained further below. 

The four main MSP categories and their eligibility requirements are as follows:

The Qualified Medicare Beneficiary (QMB) Program

The QMB program pays Medicare Part A and Part B premiums, deductibles, coinsurance and copayments as long as applicants have a single monthly income limit of $1,084 or a married couple monthly income limit of $1,457.

The Specified Low-Income Medicare Beneficiary (SLMB) Program

The SLMB program pays Medicare Part B premiums only. Applicants must meet a single monthly income limit of $1,296 or a married monthly income limit of $1,744.

The Qualified Individual (QI) Program

The QI program pays Medicare Part B premiums only, and must be applied for every year. The QI program carries a single monthly income limit of $1,456 or a married monthly income limit of $1,960.

The Qualified Disabled and Working Individuals (QDWI) Program

The QDWI pays Medicare Part A premiums only. This program requires a single monthly income limit of $4,339 or a married monthly income limit of $5,833. In addition, there is a single asset limit of $4,000 and a married asset limit of $6,000.

QDWI eligibility also requires an individual is either working, disabled, and under the age of 65 or has experienced a loss of premium-free Part A coverage because of a return to work.

What is dual eligibility?

Medicare and Medicaid often overlap when it comes to the type of care and coverage that they offer. Medicaid can help cover costs that are not paid by Medicare or supplemental insurance programs. If your parents are qualified for Medicaid and Medicare simultaneously, they are considered dually eligible.

Additionally, dually eligible beneficiaries commonly choose to obtain a Prescription Drug Plan or a Medicare Advantage plan to help cover and reduce out-of-pocket expenses. In this scenario, Medicaid helps pay expenses that Medicare does not pay, including monthly premiums for Part A (if any) and Part B, as well as copayments and coinsurance, and deductibles.

Contact MedicareInsurance.com online via our live chat feature or by phone at (800) 950-0608 to learn more about Medicare coverage options that may work for your parents.

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