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Understanding Medicaid: A Comprehensive Guide
If you’re young, healthy, and employed, you likely receive health insurance through your employer or your spouse’s employer. However, for more vulnerable populations, the government offers affordable, subsidized health care coverage through programs like Medicare and Medicaid.
How Does Medicaid Work?
Medicaid is a government health insurance program designed for low-income individuals and those with certain disabilities. Funded jointly by the federal government and the states, Medicaid is the largest source of health coverage in the U.S., covering 87 million people. However, it is administered at the state level, so programs and eligibility requirements can vary.
Who Qualifies for Medicaid?
Medicaid has strict eligibility requirements, targeting those with limited resources. Federally, the following groups are eligible:
- Low-income families
- Qualified pregnant women and children
- People receiving Supplemental Security Income (SSI)
- People with disabilities
States may also offer coverage to other groups, such as children in foster care and individuals receiving home and community-based services. Eligibility also requires U.S. citizenship or an eligible immigration status.
Income Limits for Medicaid
The federal poverty level (FPL) is used to determine Medicaid eligibility, though many states use a higher threshold to extend coverage. In states with expanded Medicaid, household income must be under 138% of the FPL. Here are the 2023 income limits based on household size:
- 1 person: $20,120
- 2 people: $27,214
- 3 people: $34,307
- 4 people: $41,400
- 5 people: $48,493
- 6 people: $55,586
- 7 people: $62,680
- 8 people: $69,773
Note: Income limits are higher in Alaska and Hawaii.
What Counts as Income?
To determine Medicaid eligibility, the government uses modified adjusted gross income (MAGI). This includes:
- Federal taxable wages, tips, and self-employment income
- Nontaxable Social Security benefits
- Retirement or pension income
- Capital gains, investment income, and rental income
- Unemployment compensation
- Untaxed foreign income
MAGI does not include Supplemental Security Income, gifts, workers’ compensation, veterans’ disability payments, or child support.
Medicaid vs. Medicare: What’s the Difference?
Medicaid is a joint state and federal program for low-income individuals and those with disabilities, offering free or low-cost health care. Medicare, however, is a federal program available to all Americans aged 65 and older, as well as some younger individuals with specific conditions. Unlike Medicaid, Medicare requires participants to pay premiums, deductibles, and copays.
How to Apply for Medicaid
To apply for Medicaid, contact your state’s Medicaid agency or visit Medicaid.gov. You can also apply through the federal health insurance marketplace at HealthCare.gov. If eligible, your application will be forwarded to your state’s Medicaid agency for review.
The Bottom Line
Medicaid can be a lifesaver for those who qualify, providing access to essential health care services. Even if you’re unsure about your eligibility, applying can help you discover other money-saving programs. If you’re struggling with medical bills or debt, exploring Medicaid options is a wise step.
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