Medicaid or CHIP (Children’s Health Insurance Program) provides health care coverage to millions Americans including eligible low-income adults, children, pregnant women, elderly adults and people with disabilities. These programs are administered by states, according to federal requirements.
What is Medicaid?
Medicaid is a joint federal and state program that, together with the Children’s Health Insurance Program, provides health coverage to over 72.5 million Americans, including children, pregnant women, parents, seniors and individuals with disabilities. Medicaid is the single largest source of health coverage in the United States.
Who is Eligible for Medicaid?
In order to participate in Medicaid, federal law requires states to cover certain groups of individuals. Low income families, qualified pregnant women and children, and individuals receiving Supplemental Security Income (SSI) are examples of mandatory eligibility groups.
The Affordable Care Act of 2010 created the opportunity for states to expand Medicaid to cover nearly all low-income Americans under age 65. Eligibility for children was extended to at least 133 percent of the federal poverty level (FPL) in every state and states were given the option to extend eligibility to adults with income at or below 133 percent of the FPL. The majority of states have chosen to expand coverage to adults, and those that have not yet expanded may choose to do so at any time.
The Affordable Care Act established a new methodology for determining income eligibility for Medicaid, which is based on Modified Adjusted Gross Income (MAGI). MAGI is used to determine financial eligibility for Medicaid, CHIP, and premium tax credits and cost-sharing reductions available through the health insurance marketplace.
MAGI is the basis for determining Medicaid income eligibility for most children, pregnant women, parents and adults. The MAGI-based methodology considers taxable income and tax filing relationships to determine financial eligibility for Medicaid.
Some individuals are exempt from the MAGI-based income counting rules, including those whose eligibility is based on blindness, disability or age (65 and older). Medicaid eligibility for individuals 65 and older or who have blindness or a disability is generally determined using the income methodologies of the supplemental security income (SSI) program administered by the Social Security Administration (some states, known as 209(b) states, use certain more restrictive eligibility criteria than SSI’s, but still largely apply SSI’s methodologies).
Medicaid beneficiaries must generally be residents of the state in which they are receiving Medicaid. They must either be citizens of the United States or certain qualified non-citizens, such as lawful permanent residents. In addition, some eligibility groups are limited by age, or by pregnancy or parenting status.
Effective Date of Coverage
Once an individual is determined eligible for Medicaid, coverage is effective either on the date of application or the first day of the month of application. Benefits may also be covered retroactively for up to 3 months prior to the month of application, if the individual would have been eligible during that period had he or she applied. Coverage generally stops at the end of the month in which a person no longer meets the requirements for eligibility.
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