Contents:

1. What is Medicaid?
2. Medicaid for Families, Children, and Pregnant Women
3. Expanded Medicaid for Children
4. The Medicaid Spend-down

1. What is Medicaid?

Medicaid pays for medical care. The rules divide people into three groups:

o The aged, blind or disabled;
o Families with children under 21 or pregnant women;
o Single people and childless couples.

2. MEDICAID FOR FAMILIES, CHILDREN, AND PREGNANT WOMEN

In this section, we discuss the Medicaid program available for families with children under 21 and pregnant women. This Medicaid program is known as the Low Income Families Medicaid Program or LIF. There are other Medicaid programs for families with children or pregnant women. These include the medically needy program and the expanded Medicaid program. If a household is not eligible for Medicaid under the LIF program, the household may be eligible for Medicaid under one of the other Medicaid programs or the children may be eligible for Child Health Plus.

Who can get Medicaid under the Low Income Families Medicaid Program (LIF)?

Families with children under 21, children under 21 not living with a relative or other caretaker, and pregnant women are all eligible for full coverage under the Medicaid program if they meet the financial and other eligibility requirements under LIF.

What are the income limits for LIF?

The income limits are similar to the income limits for cash public assistance benefits under the Family Assistance program. If you are self-employed, the term income means the total profit from the business.

Do you have to receive cash public assistance to receive LIF Medicaid?

You do not have to be getting cash assistance to qualify for LIF Medicaid. If you apply for cash assistance, you have to tell DSS that you want Medicaid also. If you do not, you will not automatically receive Medicaid. If you are eligible for cash assistance under the Family Assistance Program, you are eligible for LIF Medicaid.

What are the resource limits for LIF?

The resource limit changes often. DSS can tell you what the current limit is. Following are examples of exempt (do not count) resources:

* a home if it is your usual place of residence,
* income producing property if it is being used or reasonably expected to be used for your livelihood in the near future,
* an auto with a fair market value of $4,650. If you need the car to seek or retain employment or travel to and from work activities, the car is exempt as long as the fair market value does not exceed $9,300, and
* individual development accounts.

Do the public assistance work rules apply to the Medicaid program?

No. A person cannot be denied Medicaid or lose Medicaid because of any cash public assistance or food stamp employment rules.

Does Medicaid have any time limit?

No.

3. EXPANDED MEDICAID FOR CHILDREN UNDER 21

The Medicaid program is complicated because it has different income eligibility guidelines for different groups. In this section, we discuss the Medicaid program available for children under 21. This Medicaid program is known as the expanded Medicaid program. This program is available for children who are not eligible for the Low Income Families Medicaid Program (LIF) because their household's income is too high.

There are other Medicaid programs available to families with children, such as the medically needy program. In addition, children ineligible for Medicaid because their household income is more than the amounts set forth below, may be eligible for Child Health Plus (see separate section).

What are the income eligibility guidelines under the expanded Medicaid program?

The income eligibility guidelines under the expanded Medicaid program vary depending on family size and the age of the child. These guidelines are changed each year. In determining household size, you need to include the child and any legally responsible relative living with the child. If you are self-employed, the term income means the total profit from the business. This term is defined as gross income received less the allowable business expenses for the production of the income.

Is there a resource test?

No, there is no resource test. If the household's income is within the program limits, the child is eligible for Medicaid regardless of the household's resources.

If a child in the household is eligible for Medicaid under the expanded Medicaid program, are the parents also eligible?

No. The parents are not eligible for Medicaid under the expanded Medicaid program. The parents, however, may be eligible for Medicaid under another set of Medicaid eligibility rules.

4. MEDICAID SPENDDOWN

What is a Medicaid spenddown?

Some people have too much income to qualify for Medicaid. This amount is called excess income. Some of these people may qualify for Medicaid if they spend the excess income on medical bills. This is called a spenddown.

For example, a person over 65 is denied Medicaid because her monthly income is $50 more than the limit for Medicaid eligibility. If she has medical bills of $50 per month, the rest of her medical bills will be covered by Medicaid. The spenddown in this case is the $50 of medical bills she incurs.

Who qualifies for a spenddown?

Not everyone. You must be in one of the groups listed below:

1. children under 21
2. persons over 65
3. blind or disabled persons
4. families with one or both parents absent
5. families with one or both parents dead, disabled, or out of work

How does a spenddown work?

It works almost like a deductible for car insurance. When you have accumulated medical bills (paid or unpaid) greater than your excess income, you will receive Medicaid for that month. You are responsible for the bills up to the excess amount; medicaid will only pay those bills over the excess income amount.

If you have been hospitalized recently, you may qualify for Medicaid for up to 6 months. If you have been hospitalized within the past 6 months, be sure to tell your worker.

What medical bills can be counted towards a spenddown?

1. Your own medical bills.
2. A husband's bills for a wife's spenddown and a wife's bills for a husband's spenddown.
3. Parents' bills for their children's spenddown.
4. Medical bills of a child living with you.
5. Medical bills of a child who does not live with you, but whose medical bills you help pay for.
6. Past unpaid medical bills (sometimes up to 6 years old) for yourself or any of the people named above.
7. The part of any medical bill not covered by Medicare or private insurance.
8. Medical expenses (including health premiums) paid for you by certain public programs, for example, the Elderly Pharmaceutical Insurance Program (EPIC) and the Child Health Insurance Program (CHIP).

It is important to make sure that your doctor or other medical provider accepts Medicaid payments. Medicaid will only pay bills from a doctor, druggist, or other provider who accepts Medicaid payments. But medical bills from a provider who does not accept Medicaid may be used to spend down your excess income.

What types of medical expenses count towards a spenddown?

Are there other expenses that count?

Yes. The following medical expenses also count towards a spenddown even though Medicaid will not pay for them:

1. Chiropractor's services (and other non-covered services).
2. Medical services from providers who do not participate in the Medicaid program.
3. Some over-the-counter drugs and medical supplies, such as bandages and dressings, if they have been ordered by a doctor or are medically necessary.
Bills for cosmetics and other non-medical items do not count.

How do you know if you qualify for a spenddown?

If you have been denied full coverage under the Medicaid program, the notice DSS must send you should tell you if you qualify for a spenddown and, if so, how much the spenddown for medical expenses needs to be.

If you disagree with the decision, you can ask for a hearing. DSS calls this a 'request for a fair hearing.'

Where can you get more information?

* Cornell's Legal Information Institute - medicaid information and legal resources
* National Health Law Project - an advocacy organization
* HCFA - the agency that administers Medicaid
* New York State Department of Health

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Legal Assistance of Western New York, Inc.

This article provides general information about this subject. Laws affecting this subject may have changed since this article was written. For specific legal advice about a problem you are having, get the advice of a lawyer.  Receiving this information does not make you a client of our office.

Medicaid laws are constantly changing.  This information is correct as of June 2000.