Jane Dotson
Medicaid is a joint federal and state program that provides health coverage to over 77.9 million Americans, including children, pregnant women, parents, seniors, and individuals with disabilities. It is the largest source of health coverage in the United States, with 1 in 5 people covered by the program. Given the large number of people who rely on Medicaid, it is important to understand the implications of declining it in favor of supplemental insurance. This raises questions about eligibility, the implications for costs, and the potential impact on access to care.
Can I decline Medicaid and get supplemental insurance instead?
| Characteristics | Values |
|---|---|
| Eligibility | Low-income families, qualified pregnant women and children, and individuals receiving Supplemental Security Income (SSI) are eligible for Medicaid. |
| Income determination | The Affordable Care Act established Modified Adjusted Gross Income (MAGI) as the methodology for determining financial eligibility for Medicaid. |
| Coverage | Medicaid covers services such as doctors' visits, hospital care, home care, and skilled nursing facility care. It also provides benefits not usually covered by health insurance, such as non-emergency medical transportation. |
| Cost | Federal rules generally limit out-of-pocket costs for Medicaid beneficiaries, and they have better access to care than the uninsured. |
| Enrollment | Individuals can enroll in Medicare Part A and Part B, with most people getting Part A for free, while some have to pay a premium. |
| Secondary insurance | Medicaid can serve as secondary insurance, covering Medicare cost-sharing expenses such as coinsurance and copays. |
| Cost-sharing assistance | Depending on income, individuals may qualify for the Qualified Medicare Beneficiary (QMB) program, which eliminates Medicare cost-sharing payments. |
| State variations | Medicaid coverage and benefits vary across states, with some states establishing "medically needy programs" for individuals with high health needs and higher incomes. |
| Waivers | Section 1115 waivers allow states to test new approaches in Medicaid, such as expanding coverage, changing eligibility requirements, or modifying delivery systems. |
| Impact | Medicaid is the largest source of health coverage in the US, with 21% of people nationwide having Medicaid. It has positive effects on health, particularly during childhood. |
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What You'll Learn
Medicaid eligibility
Medicaid is a joint federal and state program that provides health coverage to over 77.9 million Americans. It is the largest source of health coverage in the United States, covering 19% of all healthcare spending and 19% of hospital spending. Medicaid covers children, pregnant women, parents, seniors, and individuals with disabilities.
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. States have additional options for coverage and may choose to cover other groups, such as individuals receiving home and community-based services, and children in foster care who are not otherwise eligible.
The Affordable Care Act of 2010 created the opportunity for states to expand Medicaid to cover nearly all low-income Americans under 65. Eligibility for children was extended to at least 133% of the federal poverty level in every state, and states were given the option to extend eligibility to adults with incomes at or below 133% of the FPL. Most states have chosen to expand coverage to adults, and those that have not yet expanded may do so at any time. The Affordable Care Act also 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-based eligibility considers taxable income and tax filing relationships and does not allow for income disregards that vary by state or eligibility group or an asset or resource test.
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). Eligibility for individuals in these categories is generally determined using the income methodologies of the SSI program administered by the Social Security Administration. States have the option to establish a "medically needy program" for individuals with significant health needs whose income is too high to otherwise qualify for Medicaid. Medically needy individuals can still become eligible by "spending down" the amount of income that is above a state's medically needy income standard. Once an individual's incurred expenses for medical and remedial care exceed the difference between their income and the state's medically needy income level, they can become eligible for Medicaid, which will then pay the cost of services that exceeds the expenses the individual had to incur to become eligible.
Medicaid beneficiaries have substantially better access to care than people who are uninsured and are less likely to postpone or go without needed care due to cost. Gaps in access to certain providers, such as psychiatrists and dentists, remain a challenge in Medicaid. However, this may reflect system-wide problems, including provider shortages in low-income communities, lower Medicaid physician payment rates, and lower Medicaid physician participation compared to private insurance.
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Medicaid and Medicare together
Medicaid and Medicare are two different programs that can work together to provide healthcare coverage for eligible individuals. While it is not possible to decline Medicaid and receive supplemental insurance instead, you can be enrolled in both programs, which are described below:
Medicaid
Medicaid is a joint federal and state program that provides health coverage to millions of Americans, including children, pregnant women, parents, seniors, and individuals with disabilities. It is the single largest source of health coverage in the United States, with 21% of people nationwide reporting having Medicaid. The percentage of people with Medicaid coverage varies by state, from 11% in Utah to 34% in New Mexico.
To be eligible for Medicaid, individuals must meet their state's rules for income and resources and be a resident of that state. States have different eligibility requirements, and some states allow individuals with high medical needs to qualify through a "spend down" program, where they can reduce their income to qualify.
Medicare
Medicare is a federal program that provides health insurance for individuals over the age of 65, as well as some younger people with disabilities.
Individuals can have both Medicare and Medicaid, known as being "dually eligible." When an individual has both, Medicare is the primary payer, and Medicaid pays last, after Medicare and any other health insurance.
Medicaid can provide secondary insurance for services covered by both programs, such as doctor's visits, hospital care, home care, and skilled nursing facility care. It can also provide premium assistance, prescription drug assistance, and cost-sharing assistance for Medicare expenses.
To learn more about Medicare and Medicaid costs and coverage, individuals can call 1-800-MEDICARE or contact their local Medicaid office.
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Income eligibility
While Medicaid is a federal-state program, each state has different rules regarding income eligibility. Generally, individuals must meet their state's rules for income and resources, as well as other criteria such as being a resident of the state. Some states have established a "medically needy program" for individuals with significant health needs whose income is too high to qualify for Medicaid under other eligibility groups. These individuals can become eligible by "spending down" their income to meet the state's medically needy income standard. This can be done by incurring expenses for medical and remedial care that is not covered by health insurance.
In addition to income requirements, states may also consider an individual's resources when determining eligibility for Medicaid. Some states offer a resource limit, allowing individuals whose income is too high to qualify for Medicaid to "spend down" their income to meet the eligibility requirements. This can include paying for non-covered medical expenses such as Medicare premiums and deductibles.
It is important to note that Medicaid is the primary payer for long-term care in the United States, and it covers a significant portion of spending in this area. Seniors and individuals with disabilities account for a substantial percentage of enrollment and spending in the program. Additionally, Medicaid provides benefits not usually covered by health insurance, such as non-emergency medical transportation and comprehensive benefits for children.
Supplemental Security Income (SSI) recipients may automatically qualify for Medicaid in some states, while in others they may need to apply. Even if SSI does not guarantee Medicaid eligibility, it is recommended to apply as states have expanded their Medicaid programs to cover more people.
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State-specific waivers
Medicaid is a joint federal and state program that provides health coverage to tens of millions of Americans, including children, pregnant women, parents, seniors, and individuals with disabilities. While Medicaid is the single largest source of health coverage in the United States, eligibility requirements and coverage options can vary from state to state.
States have the option to establish "medically needy programs" that provide coverage for individuals with significant health needs whose income is too high to qualify for standard Medicaid. Additionally, states can apply for waivers to modify certain statutory requirements of the Medicaid program. These waivers offer states the flexibility to test new approaches, expand coverage, modify delivery systems, and target specific populations.
States seeking greater flexibility in designing their Medicaid programs can apply for waivers from the Secretary of the U.S. Department of Health and Human Services (HHS). These waivers allow states to deviate from certain eligibility and benefit provisions of the Medicaid statute to explore new approaches to acute care and long-term services and supports (LTSS).
Waivers can be used to offer specialized benefits to specific subgroups, restrict enrollees to particular provider networks, or extend coverage beyond the standard groups defined in Medicaid law. For example, Section 1915(c) waivers authorize states to provide home- and community-based services (HCBS) as an alternative to institutional care in nursing homes or hospitals. These waivers often target seniors, people with disabilities, and individuals with specific conditions such as HIV/AIDS.
States can also use Section 1115 demonstration waivers to implement broad program changes or focus on specific populations. These waivers allow states to test new approaches that, in the HHS Secretary's view, are likely to promote the objectives of the Medicaid program. For instance, states have used these waivers to expand substance use disorder treatment benefits, providing residential treatment in mental institutions.
Waivers vary from state to state, and it is important to contact your state Medicaid office to determine which specific waivers and services are available in your area. These waivers empower states to tailor their Medicaid programs to meet the unique needs of their diverse populations.
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Medicaid as secondary insurance
Medicaid is a federal-state program that provides health coverage to over 77.9 million Americans, including children, pregnant women, parents, seniors, and individuals with disabilities. It is the largest source of health coverage in the United States, covering 19% of all healthcare spending and 19% of hospital spending.
Medicaid can act as a secondary insurance in certain cases. This is when a beneficiary has other sources that are legally liable for the payment of their medical costs, such as private insurance, Medicare, or other public programs. In these cases, Medicaid will pay for any remaining costs that are not covered by the primary insurance. For example, if you have Medicare and Medicaid, Medicare will pay first, and Medicaid will pay last. Medicaid will cover most of the hospital bills that Medicare Part A doesn't pay, and you may be billed for a small amount, called "co-insurance."
Medicaid also interacts with other payers when beneficiaries have coverage through a third party that is liable to pay for their healthcare services. This is known as Third-Party Liability (TPL). In these cases, the third party is legally obligated to pay for part or all of the expenditures for medical assistance furnished under a Medicaid state plan. States are required to take all reasonable measures to identify these third parties and ascertain their legal liability to pay for care and services under the Medicaid state plan. Examples of third parties that may be liable include certain individuals, entities, insurers, or programs such as the Department of Defense, the Military Health Services system, or the TRICARE program.
It is important to note that Medicaid beneficiaries must identify potential third-party sources of coverage and assign the Medicaid agency the right to pursue third-party liability on their behalf. Additionally, Medicaid may pay for services that might otherwise be financed by other public agencies or programs if they are designated as payers of last resort after Medicaid or are not considered legally liable third parties.
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Frequently asked questions
Yes, you can decline Medicaid and get supplemental insurance instead. However, it is important to note that Medicaid is a significant source of funding for the US healthcare system and provides coverage for a large number of Americans, including those with low incomes, children, pregnant women, and individuals with disabilities.
Medicaid provides comprehensive coverage for various services, including doctors' visits, hospital care, home care, and skilled nursing facility care. It also covers prescription drugs, non-emergency medical transportation, and Early Periodic Screening Diagnosis and Treatment (EPSDT) services for children. Additionally, Medicaid can provide secondary insurance, premium assistance, and cost-sharing assistance.
To enroll in Medicaid, you must meet certain eligibility requirements, which are primarily based on income. You can contact your local Medicaid office or visit the official website to learn more about the specific requirements and enrollment process.
Alternatives to Medicaid include private insurance, Medicare (for those who are eligible), and other state-specific programs. Each state offers a State Health Insurance Assistance Program (SHIP) that provides free counseling and assistance to help individuals understand their insurance options and enroll in the best program for their needs.
