Financial Provisions for Medicaid
Medicaid is sort of a subsidy-based subsidy to the low-income population. It is federally and state funded, with separate eligibility and financial guidelines for each state. It is important for those seeking Medicaid benefits to understand these financial requirements.
Income Limits
Income is the main determinant of Medicaid eligibility. Federal income limits serve as a baseline, but states can broaden coverage above those thresholds. As a general principle, Medicaid is available to individuals and families with incomes at or below 138% of the FPL. As of 2024, this means:
- $20,120 a year for an individual
- $27,214 annually for a two-person household
- $34,307 annually for a three-person family
- Other Technologies:7500$ Family of 4
Pregnant women, children and those with disabilities might have different income thresholds than described here, and some states have expanded Medicaid programs that allow for greater income limits.
Asset Limits
Some Medicaid programs have asset limits—especially for long-term care and elderly applicants—in addition to income requirements. Countable assets include things like:
- Bank accounts
- Stocks and bonds
- Real estate, other than primary residence (in some cases)
Cash and other liquid assets
Asset limits differ by state, but usually a single applicant can’t have more than $2,000 in countable assets, while a married couple can have about $3,000. Some assets, including a primary residence (with an equity limit), personal property and a car, can be excluded from these calculations.
Medically Needy Pathway
A few states have a “medically needy” program that enables those with high medical costs to qualify for Medicaid, even if their income surpasses the standard limits. Under this program, people are able to “spend down” their income by subtracting medical expenses, bringing their countable income down to levels that would be eligible for Medicaid.
Look-Back Period for Transfers of Assets
A five-year "look-back" period applies for Medicaid long-term care applicants. This means Medicaid will examine financial transactions that occurred within the past five years to ensure that no property was transferred at a below-market value to qualify for benefits. If any improper transfers are discovered you could have a penalty period in which you are not qualified for Medicaid coverage.
State Variations
Medicaid is a state-run program, so financial eligibility guidelines differ. The ACA has since made it easier for individuals to qualify for an expanded version of Medicaid — based on income alone — in some states. Some have stricter rules or added conditions. Check with the state’s Medicaid agency for the specific financial eligibility rules.
Conclusion
In the case of people needing help with healthcare, it is essential to be aware of the financial limits under Medicaid. Eligibility has a lot to do with income and asset limits, the medically needy pathway and look-back provisions. Because Medicaid rules also differ by state, applicants should check with their state’s Medicaid office or a financial planner to make sure they are complying with all the requirements.