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If you’ve fallen on hard times, applying for Medicaid may not be the first item on your to-do list — but you might want to add it now.
Medicaid is the public health insurance program available to people with low incomes. It covers more than 72 million Americans, making it the single largest provider of health insurance in the U.S. If you have a medical condition or take expensive prescriptions, it can greatly help in your time of need.
Unlike Medicare, the federal health insurance program primarily for people ages 65 and older, Medicaid is run jointly by federal and state governments. So, although your state government determines many benefits, all state Medicaid programs must meet certain minimum federal standards. Here’s what to know about Medicaid.
How to qualify for Medicaid
Whether or not you qualify for Medicaid depends largely on where you live. In 2010, the Affordable Care Act gave states the option of expanding coverage to anyone with income at or below 138% of the federal poverty level. To calculate that, you'd use your “modified adjusted gross income,” which is total income minus certain expenses and tax deductions. Healthcare.gov has details on calculating modified adjusted gross income.
The income limit to qualify for Medicaid may increase if you:
Have children or disabled dependents.
Have high medical bills due to an illness.
Are pregnant or disabled.
If you have children and make too much money to qualify for Medicaid, you may still be able to enroll your kids in the Children’s Health Insurance Program, or CHIP. However, if you are eligible for Medicaid, your entire family will be on Medicaid when you are accepted.
Most states have expanded Medicaid and more are expected to do so. If your state did not expand Medicaid and you have no children, your chances of qualifying based on income alone are low.
What Medicaid pays for
Medicaid covers a lot of the same medical services a traditional health insurance plan would. Hospital care and doctor visits are paid for with low or no copays for adults and children alike.
Though states determine their own Medicaid benefits, they are required to cover certain services. Health services that Medicaid will pay for in full are:
Pregnancy-related services, including assistance quitting tobacco.
Preventive-care services for children.
Most other services for children under 18, unless they are in higher-earning households.
The following Medicaid benefits are required in all states, but may come with a copay, depending on where you live:
Inpatient and outpatient hospital services.
Selected preventive care known as EPSDT: early and periodic screening, diagnostic, and treatment services.
Nursing facility care.
Home health services.
Rural health clinics.
Nurse midwife and freestanding birth center services.
Certified pediatric and family nurse practitioners.
Transportation to medical care.
Sometimes your doctor must prove to the state that your care is necessary in order to get Medicaid to pay. This is called “prior authorization,” and it’s a method used by all kinds of health insurers to reduce wasteful spending on certain services.
All states offer dental benefits to children under Medicaid, and most states do for adults, too. According to a June 2015 federal report, 27 states’ Medicaid programs offer preventive dental services for adults and 26 states cover restorative services like cavity fillings. Nineteen states cover only emergency dental care for adults with Medicaid.
Most states pay for eye exams and glasses.
Each state has the option of setting premiums, deductibles and out-of-pocket costs for some Medicaid beneficiaries.
Higher earners with Medicaid, meaning those with incomes at or above 150% of the poverty level, may pay more for the following health services:
For prescriptions, states may charge coinsurance of up to 20% of each drug’s cost to encourage the use of lower-cost drugs.
If people in this group use the emergency room in a non-emergency situation, they could also be charged up to full price for care. In this case, the hospital’s physicians must determine whether the visit was an emergency.
Some higher earners could also pay small monthly premiums for Medicaid. For example, children in California households earning 160% to 266% of the federal poverty level pay a monthly premium of $13 per child, says Tony Cava, a spokesman for Medi-Cal, California’s Medicaid program. Working people with disabilities in California can earn up to 250% of the federal poverty level and still “receive full-scope Medi-Cal by paying a low monthly premium based on countable income,” Cava says.
What Medicaid doesn’t pay for
Like many health plans, Medicaid doesn’t pay for cosmetic surgery, and in most states doesn’t cover holistic therapies like acupuncture.
States are not allowed to use federal funds to pay for elective abortions, but may use their own budgets to cover abortion services under Medicaid. Seventeen states currently cover medically necessary abortions, according to reproductive health organization Guttmacher Institute. An additional 32 states and Washington, D.C., have Medicaid programs that will cover the procedure in situations of rape, incest or where the mother’s life is in danger. South Dakota Medicaid pays for abortions only to protect the mother’s life.
How to apply for Medicaid
You can apply for Medicaid at any time; you do not have to wait for an open enrollment period. If you think medical expenses may qualify you for Medicaid, you can apply to find out.
You can apply for Medicaid even if you already have health insurance, and you won’t be penalized for switching plans outside of open enrollment. If you do already have insurance and are deemed eligible for Medicaid, make sure you discontinue your current health plan.
If you think you make too much money to qualify for Medicaid, but your income is close to the eligibility levels, there are three good reasons to apply anyway:
You may still gain coverage if you have a lot of medical bills.
If you have children, your application doubles as a CHIP application for them.
Your state’s Medicaid office can help find other health insurance solutions for you.
You can apply for Medicaid in two ways: through the Affordable Care Act marketplace or through your state’s Medicaid office. Once you apply, you should receive more information on what to expect and how to use your Medicaid benefits.