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Medicaid Financial Qualifications

The federal government provides states funds for Medicaid coverage. Medicaid is reserved for families with young children and adults who are disabled. These individuals are unable to pay for private insurance. Medicaid pays for necessary hospital care, doctors, and even dental and vision care. The federal government requires states to implement their own Medicaid asset recovery plans to help defray Medicaid's costs. Medicaid applicants must deplete their resources prior to seeking coverage "See Resources."

  1. OBRA Qualification Rule

    • Through the Omnibus Reconciliation Act of 1993 (OBRA), states provide only their neediest residents with Medicaid coverage. OBRA also requires states to recover funds from Medicaid's recipients after the patient receives care "See Reference 1."

    Limited Income and "Look Back" Qualification Rule

    • States may look back for 36 months prior to the beginning of Medicaid coverage to nullify and transfer between family members. Recognizing that some applicants may try to deplete assets through transferring property between family members, any transfer of property within the 3-year period is within Medicaid's recovery allowance "See Reference 2."

    Depletion of Real and Personal Property Qualification Rule

    • Medicaid rules require the applicant to deplete personal property, such as heirlooms and jewelry. Medicaid allows the recipient to keep one private vehicle as long as the recipient or the recipient's dependents use it. The recipient must not have real property, except for use within the "Spousal Impoverishment" exception "See Reference 3."

    No Estate or Trust Assets Qualification Rule

    • Each state must recover Medicaid assets, which help cover nursing care for Medicaid recipients age 55 or older. States must cover the entire costs for Medicaid funding if they implemented their OBRA plans after OBRA's enactment on May 14, 1993. Additionally, Medicaid beneficiaries or their families cannot set up trusts by using family financing that could have paid for Medicaid coverage. Medicaid laws mandate that the applicant exhaust any eligible resources that are included in the trust's property or "res." There is an exception for trust property or funds used to help disabled children and non-profit charities "See Reference 4."

    Undue Hardship Exceptions

    • States usually require beneficiaries to have limited resource, which includes real estate. Prior to Medicaid eligibility, the applicant must allow recovery of his home to subsidize coverage. Each state must provide hardship exception to financial asset recovery plans if the recovery of assets would lead to undue hardship to the recipient or his dependents. The "Spousal Impoverishment" exception allows a recipient's spouse to stay in the primary residential home without the state selling the couple's home "See Reference 5."

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