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Medicaid or CHIP Coverage

Understanding Medicaid: What You Need to Know

Are you living below the poverty line? Does your current income prevent you from being able to afford reliable health coverage? If so, then you may want to apply for Medicaid, a government health-care program designed to help low-income families and individuals receive the medical care they need. You may also qualify through disability.

The Centers for Medicare & Medicaid Services (CMS) reports that as of February 2015, over 70.5 million people nationwide were enrolled in Medicaid or the Children's Health Insurance Program (CHIP*). CHIP and Medicaid are closely related CMS programs. CHIP provides health care to children who qualify for the program; like Medicaid, it's run by both the federal and state governments.

According to a 2015 article on the CMS website*, people on Medicaid can generally get the care they need just as well as those who have private insurance plans. The article reports that Medicaid's costs per person are considerably lower than under private insurance, for both children and adults.

Medicaid (known in some states under different names, such as Medi-Cal in California) may cover a variety of health-care needs. While benefits vary from state to state, Medicaid programs in all states must cover certain benefits, such as (but not limited to):

  • Inpatient hospital care
  • Doctor visits
  • Rural health clinic services
  • Certified Pediatric and Family Nurse Practitioner services
  • Counseling to help pregnant women quit smoking
  • Family planning services
  • Lab work and x-ray services

Medicaid vs. Medicare

First of all, it's important to understand the differences between Medicaid and Medicare, as they're often confused. Both are government-funded programs related to health coverage. However, the main difference between the two is that Medicaid is meant for low-income and disabled people of all ages, whereas Medicare is generally limited to those age 65 and older. You can also qualify for Medicare under the age of 65 in some situations.

Also, while Medicare is a federal program, Medicaid is both federal- and state-based. Individual states have some flexibility in implementing the program. The states determine which optional Medicaid benefits to cover (those not mandated by the federal government); the program even goes by different names in some states, such as MassHealth in Massachusetts, where it's combined with the CHIP program.

Dual eligibility

Although Medicaid and Medicare are different programs, sometimes you may qualify for both programs at the same time. People who qualify for both are known as "dual-eligibles."

Medicaid costs

One of the common misconceptions people have about Medicaid is that it's always free to those who are eligible. In reality, many people who are covered by Medicaid still pay copayment and some other related expenses. Some medical care may be free, but this typically depends on the specific state you live in (each state handles its own Medicaid program) and your income. A good way to find out what costs you can expect is to contact your local Medicaid office.

Are you eligible for Medicaid?

Wondering if you could qualify for Medicaid? One of the main criteria used to determine eligibility is your level of income. If you don't have income over the federal poverty level and have limited assets, depending on your specific circumstances and the state in which you reside, you may qualify for some level of Medicaid coverage.

Keep in mind, however, that there are different categories of eligibility—and each category has its own unique set of requirements. For example, the eligibility requirements for a pregnant woman may not be the same as that of a disabled person.

How to apply for Medicaid

The best way to find out whether or not you're eligible for Medicaid is to submit a Medicaid application. Here are two ways to apply for Medicaid:

Once you apply for Medicaid, depending on your specific circumstances, it can take up to several weeks to process the Medicaid application. You can generally speed up your Medicaid application review process by making sure you completely fill out your application and include all required paperwork. If you fail to do this, your review could take longer. Keep in mind that once you're approved and enrolled, your eligibility will be reviewed every year.

What if your Medicaid application is denied?

If your Medicaid application is denied, you will receive a letter explaining why, along with information on appealing your decision. It is not uncommon for people to be denied the first time they apply for Medicaid; sometimes, the reason may be as simple as an error on their application paperwork. This can be resolved through an appeal, so if you're denied, it's always a good idea to review your denial letter to determine the reason. The denial letter includes information on appealing the decision.

Also, remember that if you're not eligible now, you can always re-apply for Medicaid if your income status changes. Once you're enrolled, Medicaid reviews your eligibility status annually.

Alternatives to Medicaid

Even if you're not eligible for Medicaid, there are assistance programs that you may want to consider. These include state-funded and privately-funded programs, along with affordable short-term coverage or individual plans available through the federal health insurance Marketplace. An insurance broker such as eHealth can help you find interim coverage that best fits your budget and needs.

*Sources: Centers for Medicare & Medicaid Services: