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Medicaid Financial Eligibility for Seniors and People with Disabilities in 2015

Federal Core Eligibility Pathways for Seniors and People with Disabilities

SSI Beneficiaries

States generally must provide Medicaid to people who receive federal Supplemental Security Income (SSI) benefits.1 To be eligible for SSI, beneficiaries must have low incomes, limited assets, and an impaired ability to work at a substantial gainful level as a result of old age or significant disability.  The SSI federal benefit rate is $733 per month for an individual and $1,100 per month for a couple in 2015, which is about 75% of the federal poverty level (FPL).2 SSI beneficiaries also are subject to an asset limit of $2,000 for an individual and $3,000 for a couple.

As of 2015, 10 states have elected the Section 209(b) option to apply Medicaid eligibility rules to SSI beneficiaries that are different from those under the SSI program. SSI is administered by the federal Social Security Administration (SSA). If states do not want to accept SSA’s determination of an SSI beneficiary’s low income and/or disability status when determining whether that person is eligible for Medicaid, states can use different rules under Section 209(b). Specifically, states can use financial and/or functional eligibility criteria that are more restrictive than the federal SSI rules, as long as the state’s rules are no more restrictive than the rules it had in place in 1972, when the SSI program was enacted.3 States with Section 209(b) programs in 2015 are CT, HI, IL, MN, MO, NH, ND, OH, OK, and VA. Two of these states (CT and OH) use Section 209(b) to apply more restrictive income eligibility limits than the federal SSI rules, although Connecticut also uses a more generous income disregard than the federal SSI general income disregard ($337 vs. $20) (for a discussion of disregards, see Box 1). Four of the Section 209(b) states (CT, MO, NH, and OH) apply a lower asset limit than the federal SSI rule, and two states (MN and ND) use a higher asset limit (Table 2).

Box 1: Countable Income and Assets and Disregards in Determining Financial Eligibility
States have rules about which sources of income and assets are included, or “countable,” when determining financial eligibility for Medicaid. Many states use the federal SSI financial methodology to determine Medicaid eligibility in age and disability-related pathways. Under the SSI rules, an individual’s home, one car used for household transportation, and a certain amount of funds for prepaid burial expenses are examples of assets that may be excluded from the limit of $2,000 for an individual or $3,000 for a couple.

Additionally, states may apply rules that disregard a portion of an individual’s countable income or assets. For example, under federal SSI rules, $20 is typically subtracted from a person’s monthly income before comparing the remaining amount to the relevant income limit for a Medicaid coverage group. Other disregards also may apply, depending on the source of income. For example, earned income may be subject to an additional disregard of $65 plus half of the remaining amount under federal SSI rules. Consequently, a person may have actual income that exceeds the limit for a certain eligibility pathway but still be eligible for Medicaid as a result of disregards that reduce his or her countable income.

Medicare Savings Programs for Dual Eligible Beneficiaries4

States must offer Medicare Savings Programs (MSPs) through which low-income Medicare beneficiaries receive Medicaid assistance with some or all of their Medicare premiums, deductibles, and other cost-sharing requirements.5 Medicare’s out-of-pocket costs can be high. For example, Medicare Part A, which covers inpatient hospital services, has an annual deductible of $1,260 in 2015.6 Medicare Part B, which covers outpatient services, requires a monthly premium which was $104.90 for most beneficiaries in 2015. Part B also requires an annual deductible which was $147 in 2015, and co-insurance of 20% of the Medicare-approved cost of services after the deductible is met.7 To help low-income Medicare beneficiaries with these costs, state Medicaid programs must offer three MSPs:8

  • Qualified Medicare Beneficiaries (QMBs) have incomes up to 100% FPL ($981 per month for an individual and $1,328 per month for a couple in 2015).9 Medicaid pays Medicare premiums and cost-sharing obligations for QMBs.
  • Specified Low-Income Medicare Beneficiaries (SLMBs) have slightly higher incomes (from 100 to 120% FPL) and receive help with Medicare premiums only.10 Most states set their SLMB eligibility income limits at 120% FPL ($1,177 per month for an individual and $1,593 per month for a couple in 2015).
  • Qualified Individuals (QIs) are eligible for Medicaid assistance with paying their Medicare Part B premiums through an expansion of the SLMB program passed by Congress in 1997. The QI program covers those with incomes up to 135% FPL ($1,325 per month for an individual and $1,793 per month for a couple in 2015).11 However, Congress only appropriates a limited amount of funds to each state to pay for the QI program. Therefore, once a state’s appropriation is spent each year, additional individuals who meet the QI eligibility criteria cannot receive help.

Three states use income limits higher than the federal minimum for their MSPs (CT, DC, and ME) (Table 3). DC’s MSP income limit is effectively 300% FPL ($2,943 per month for an individual in 2015) after accounting for income disregards (see Box 1), and Connecticut provides MSP eligibility for individuals with incomes up to 211% FPL ($2,070 per month for an individual and $2,802 per month for a couple in 2015). Maine has an income limit of 140% FPL ($1,373 per month for an individual in 2015) for QMBs and 175% FPL ($1,717 per month for an individual in 2015) for SLMBs and QIs.12

Most states have asset limits for their MSPs. The typical MSP asset limit is $7,280 for an individual and $10,930 for a couple in 2015. However, some states have slightly (CO, IL, NM) or substantially (ME, MN) higher asset limits. For example, Maine’s MSP asset limit is $58,000 for an individual and $87,000 for a couple. Additionally, eight states have no asset limits for their MSPs (AL, AZ, CT, DE, DC, MS, NY, and VT). By contrast, NJ has an asset limit of $4,000 for an individual and $6,000 for a couple in its QMB program (Table 3).

State Optional Eligibility Pathways for Seniors and People with Disabilities

Seniors and People with Disabilities with Incomes above SSI but Below Poverty

Twenty-one states have elected the option to provide Medicaid to seniors and people with disabilities whose incomes exceed the SSI limit but are still below the federal poverty level ($981 per month for an individual in 2015).13 Eighteen of these states set their income eligibility level at 100% FPL, the federal maximum for this pathway, and three states (AR, FL, and VA) selected an income threshold between 76 and 99% in 2015. Five states (ID, MO, NH, NY, and WI) only cover SSI beneficiaries but due to state supplemental payments and/or income disregards, their effective income eligibility limit is above 75% FPL (Figure 2 and Table 2).

Figure 2: Medicaid Eligibility for Aged, Blind, Disabled Pathway by State, 2015

Figure 2: Medicaid Eligibility for Aged, Blind, Disabled Pathway by State, 2015

All states except one (AZ) electing this optional pathway apply an asset limit. Most states use the SSI asset limit of $2,000 for an individual and $3,000 for a couple when determining Medicaid eligibility for this group. Eight states (AR, DC, FL, MN, NE, NJ, RI and SC) have higher asset limits (Table 2).

Medically Needy Coverage

Thirty-three states have a medically needy program that extends Medicaid eligibility to individuals with high medical expenses whose income exceeds the maximum limit for other pathways, but who would otherwise be eligible for Medicaid. States electing the medically needy option must cover certain groups of people, such as pregnant women and children, and can choose to also extend medically needy coverage to other groups, such as seniors and people with disabilities.14 All of the states with medically needy programs except Tennessee include seniors and people with disabilities. People who qualify through the medically needy pathway must meet the eligibility criteria for another coverage group but for their income and/or assets. (For additional details, see Box 2). States have the option to provide a more limited benefit package to people who qualify as medically needy as opposed to categorically needy. The program accounts for a small share of Medicaid enrollment (3.2 million individuals or 4.7% of total Medicaid enrollment in FY 2011)15, but remains an important pathway to Medicaid eligibility, acting as a last resort for those whose medical expenses overwhelm their income.

Box 2: Categorically Needy vs. Medically Needy
Before the ACA, federal law allowed people to become eligible for Medicaid only if they fit into a certain category (unless the state had a Section 1115 waiver that used cost savings to expand coverage). The traditional “categorically needy” groups include children, pregnant women, parents, seniors, and people with disabilities. The ACA eliminates the need to fit into a category by expanding Medicaid to nearly all adults with incomes up to 138% FPL ($1,353 per month for an individual in 2015). In states that have not adopted the ACA’s Medicaid expansion, people still must fit into one of the specified categories to qualify for coverage today. In addition, the traditional categories remain relevant to determining eligibility for a “medically needy” group because beneficiaries who qualify as medically needy must still fit into one of the covered categories. Thus, the medically needy option is a way for states to expand Medicaid eligibility, but it remains limited to specified groups. States cannot use the medically needy option to expand coverage to adults who do not fit into one of the traditional categories, regardless of how poor they are or how extensive their medical needs.

In 2015, the median medically needy income eligibility standard for an individual was $483 per month, or about 49% FPL. Income eligibility standards for the medically needy program vary across states, but are typically well below poverty (Figure 3 and Table 4).16 Eight states set their medically needy income standards at or above the SSI level ($733 per month for an individual or 75% FPL in 2015), and 25 states set their medically needy income standards below the SSI level. In 18 states, the medically needy income standard was below 50% FPL, or $490 per month in 2015. Some states (CT, VA, and VT) vary their medically needy income levels by region to account for variation in cost of living in different geographic areas. For more information about how to determine medically needy financial eligibility, see Box 3.

Figure 3: Medicaid Eligibility for Medically Needy Pathway by State, 2015

Figure 3: Medicaid Eligibility for Medically Needy Pathway by State, 2015

Most states (20 of 33) set the asset limits for medically needy coverage at SSI levels ($2,000 for individuals and $3,000 for couples). One state (CT) has a medically needy asset limit lower than the SSI level, and 12 states (DC, FL, IA, KY (couple limit only), MN, NE, NH, NJ, NY, ND, PA, and RI) have higher asset limits (Table 4).

Box 3: Determining Medically Needy Eligibility
There are two ways that individuals can become eligible for Medicaid through the medically needy pathway. First, people with incomes above the categorically needy income level associated with a certain coverage group (see Box 2 for a discussion of categorically needy), but below the state’s medically needy income level may be eligible under the medically needy option. Second, people who “spend down” to the state’s medically needy income level by subtracting incurred medical expenses from their incomes may qualify. States select a budget period of between one and six months during which an individual must incur enough expenses to decrease his/her income below the medically needy threshold. Most states with medically needy programs use a budget period of either one month or six months (Table 4).17

Children with Significant Disabilities

Katie Beckett Children Living at Home Who Need Long-Term Care

All states except Tennessee have opted to provide a Medicaid coverage pathway for at least some “Katie Beckett” children up to age 19 with significant disabilities living at home without regard to parental income (Figure 4 and Table 1). States can elect to cover Katie Beckett children through a state plan option18 or through an HCBS waiver; providing coverage through a waiver allows states to cap enrollment, which is not permitted under state plan authority. (Tennessee provides waiver coverage to “medically eligible” children in households with incomes below 200% FPL; enrollment in this pathway is currently closed except for rollovers from those losing coverage under traditional groups.)

Figure 4: Medicaid Eligibility Pathways for Children with Significant Disabilities, 2015

Figure 4: Medicaid Eligibility Pathways for Children with Significant Disabilities, 2015

As of 2015, 11 states elect the Katie Beckett state plan option, 33 states provide comparable coverage through a waiver, and 7 states offer both state plan option and waiver pathways for children with significant disabilities (states may choose to offer different pathways to different target populations). Under either the state plan option or a comparable waiver, states can target populations based on the type of long-term care services required (hospital, skilled nursing facility, intermediate care facility, intermediate care facility for individuals with mental disease, intermediate care facility for people with intellectual and developmental disabilities).

The income eligibility limits associated with the Katie Beckett option are generally 300% of SSI ($2,199/month in 2015), with a $2,000 asset limit, considering only the child’s own income and assets. Under the Katie Beckett pathway, parental income and assets are disregarded when determining Medicaid eligibility for children with disabilities living at home, exactly as they are for children with disabilities residing in an institution. This option makes it possible for these children to receive necessary care while remaining at home with their families. Children also must meet SSI medical disability criteria and otherwise qualify for an institutional level of care (according to functional eligibility criteria set by the states). Three states (AR, CT, and ME) with Katie Beckett waiver programs reported requiring beneficiaries to pay a monthly premium.

Family Opportunity Act Buy-In

Five states (CO, IA, LA, ND, and TX) utilize the Family Opportunity Act (FOA) option, a Medicaid buy-in program for children with significant disabilities (Figure 4). The FOA pathway allows states to cover children who meet SSI medical disability criteria in families with incomes up to 300% FPL ($5,022 per month for a family of three in 2015).19 Unlike the Katie Beckett option, the FOA option does not require children to meet an institutional level of care. Three FOA states (CO, IA, and LA) extend coverage up to 300% FPL, while North Dakota and Texas cover children up to 200% FPL and 150% FPL, respectively. Assets are not considered when determining a child’s eligibility under the FOA option. However, states are permitted to charge premiums equal to no more than 5 percent of the family’s gross countable income, and four of the five FOA states (excluding IA) impose a premium on FOA participants.

Medicaid Buy-In for Working People with Disabilities

Over three-quarters of states (44) allow working individuals with disabilities, whose incomes and/or assets exceed the limits for other eligibility pathways, to “buy-in” to Medicaid coverage.20 This option, authorized under the Ticket to Work and Work Incentives Improvement Act, provides people with disabilities the opportunity to work and access the health care services and supports they need, without having to choose between working and qualifying for Medicaid. According to CMS, over the past decade, more than 400,000 working individuals with disabilities have taken part in this Medicaid buy-in program.21

The median income limit for the Medicaid buy-in pathway for working people with disabilities in 2015 was $2,453 per month (or 250% FPL) for an individual. The median asset limit for this pathway was $10,000 for an individual and $15,000 for a couple in 2015. Four states (AR, MA, MN and NC) have no income limit for buy-in eligibility for working people with disabilities, and eight states (AZ, AR, CO, DE, DC, MA, WA and WY) have no asset limit for this pathway. States determine the work requirement associated with their buy-in programs, and definitions of work vary by state. For example, Connecticut requires substantial and reasonable work effort, while Mississippi requires a minimum of forty hours per month at some type of paid activity. Of 40 states responding to this question, all but seven charge income-based premiums for buy-in participants (Table 5).

Financial Eligibility for People who Need Long-Term Care

Special Income Rule

Forty-four states allow people whose functional needs require an institutional level of care to qualify for Medicaid with incomes up to 300% of the SSI level ($2,199 per month for an individual in 2015), known as the “special income rule.”22 People who qualify for Medicaid under the special income rule typically are also subject to an asset limit, and most states apply the SSI limits of $2,000 for an individual and $3,000 for a couple (Table 6).

Nearly all the states using the special income rule apply it to both people in institutions, such as nursing facilities and intermediate care facilities for people with intellectual disabilities, and people receiving services in the community.23 Michigan uses the special income rule when determining eligibility for institutional services but not for HCBS. Minnesota applies the special income rule to institutional services and to seniors living in the community but not to other groups seeking HCBS. Missouri’s rules vary by program. By contrast, Massachusetts applies the special income rule only to HCBS and not to institutional care. Aligning financial eligibility rules across long-term care settings is important to eliminating programmatic bias toward institutional care. For example, if people can qualify for institutional services at higher incomes than required to qualify for community-based services, they may choose to enter a nursing facility when they need care instead of going without care while spending down to the lower HCBS level.

Personal Needs Allowance

The median personal needs allowance amount for an individual residing in an institution was $50 per month in 2015. Four states (AL, IL, NC, and SC) set their personal needs allowance at the federal minimum of $30 per month. Once an individual requiring an institutional level of care has established Medicaid eligibility, some of his or her income is used to pay for Medicaid services. For individuals residing in an institution, most of their incomes are applied to the cost of that care, with the exception of a small personal needs allowance used to pay for personal needs that are not covered by Medicaid, such as clothing24 (Table 7).

The median personal needs allowance for a Medicaid beneficiary residing in the community was $1,962 per month in 2015.25 These amounts ranged from a low of $77 per month in Maryland to a high of $2,199 per month (300% of SSI) in 19 states.26 Medicaid beneficiaries receiving HCBS are required to apply a portion of their income to their cost of care, although states generally allow them to retain more of their income to maintain themselves in the community than if they were living in an institution. The personal needs allowances established by states play a critical role in determining whether individuals can afford to remain in the community and avoid or forestall institutional placement (Table 7).

Spousal Impoverishment Protections

When a married Medicaid beneficiary is institutionalized, nine states allow the spouse remaining in the community to retain $1,991 in income per month (the federal minimum), and 16 states permit $2,981 per month (the federal maximum) in 2015. The remaining states established a level between the federal minimum and maximum (Table 7). These rules seek to ensure that the spouse who remains in the community has adequate income to meet his or her needs.27

Fifteen states allow the community spouse to retain $119,200 in assets (the federal maximum). States can set the community spouse’s asset limit between $23,844 and $119,200 in 2015 (Table 7).

Nearly all states offer spousal impoverishment protections to Medicaid beneficiaries receiving home and community-based waiver services.28 (Minnesota only offers spousal impoverishment protections to seniors receiving HCBS, and Illinois’ protections are limited to certain populations) (Table 7).

Over three-quarters of states (40) limit home equity to the federal minimum amount of $552,000 for Medicaid beneficiaries seeking eligibility for long-term care services, and nine states allow the upper limit of $828,000 (Table 7). One state (WI) limits home equity to $750,000, and another state (CA) has no limit on home equity.29

Miller Trusts

Less than half (24) of the states allow an individual residing in an institution to qualify for Medicaid with income higher than 300% of SSI if his or her excess income is administered through a special type of trust, called a Miller trust.30 Seventeen of these states do not cap the amount that can be put into the trust (Table 7). Income from the trust can be used to fund the Medicaid beneficiary’s personal needs allowance as well as a monthly allowance for the beneficiary’s spouse who remains in the community. Any additional income from the trust goes toward the beneficiary’s cost of care. States are able to recover funds remaining in the trust after the individual’s death to reimburse care costs.

Eighteen of the 24 states that allow Miller trusts for institutional care also allow individuals to use Miller trusts to qualify for Medicaid HCBS. The six states that offer Miller trusts for institutional care but not for HCBS are Alabama, Alaska, Kentucky, Nevada, South Dakota, and Wyoming (Table 7).

Section 1915(i) Eligibility Pathway for People who Need HCBS

Some of the 17 states electing the Section 1915(i) state plan option for HCBS are using it as an independent Medicaid eligibility pathway.31 States also can use Section 1915(i) to provide HCBS to individuals who are already eligible for Medicaid through another pathway. Additionally, two states (MN and TX) were awaiting CMS approval of a Section 1915(i) state plan amendment (SPA) at the time of the survey. Section 1915(i) is unique in that it creates both an optional independent eligibility pathway and a benefit package authorizing HCBS (see Box 4 for more details about Section 1915(i)). The ACA amended Section 1915(i) to allow states to provide full Medicaid benefits, as well as HCBS, to people who are not otherwise eligible for Medicaid and who meet Section 1915(i) financial and functional eligibility criteria.32 Under Section 1915(i), states can cover (1) people up to 150% FPL with no asset limit who meet functional eligibility criteria and will receive state plan HCBS; and/or (2) people up to 300% SSI who would be eligible for Medicaid under an existing HCBS waiver and will receive state plan HCBS. Section 1915(i) differs from Section 1915(c) HCBS waivers in that Section 1915(i) requires beneficiaries to have functional needs that are less than what is required to qualify for an institutional level of care. This enables states to offer HCBS as preventive services in efforts to delay or foreclose the need for most costly care or institutionalization in the future. Adults with significant mental health needs, people with intellectual and developmental disabilities, and children with significant mental health needs are the most frequently cited target populations in states’ Section 1915(i) SPAs. See Box 5 for an example of a state’s use of Section 1915(i) as an independent pathway to Medicaid eligibility.

Box 4: Section 1915(i) HCBS and Enrollment Management Strategies
Section 1915(i) allows states to offer HCBS through their Medicaid state plan benefit package instead of through a Section 1915(c) waiver. The ACA amended Section 1915(i) so that states can now offer the same range of HCBS under that option as are available under Section 1915(c) waivers. Unlike Section 1915(c) waivers, states are not permitted to cap enrollment or maintain a waiting list for services under Section 1915(i), and Section 1915(i) services must be available statewide. However, Section 1915(i) allows states to target benefits to specific populations and to manage enrollment by restricting functional eligibility criteria if a state’s anticipated number of beneficiaries served will be exceeded.    
Box 5: Indiana’s Section 1915(i) State Plan Amendment
ndiana uses Section 1915(i) to provide Medicaid to adults with mental health conditions and incomes up to 300% of SSI ($2,943 per month in 2015). Consistent with federal rules, there is no asset limit under Section 1915(i). Indiana’s Section 1915(i) population includes those who lost Medicaid when the state eliminated its spend down pathway in 2014. The state’s functional eligibility criteria include needs related to management of behavioral and physical health, impairment in self-management of physical and behavioral health services, a health need that requires support in coordinating behavioral and physical health treatment, and a recommendation for intensive community-based care.

The ACA’s Impact on Seniors and People with Disabilities

Medicaid Expansion as an Eligibility Pathway for People with Disabilities

Non-elderly adults with incomes up to 138% FPL ($1,353 per month for an individual in 2015) can qualify for Medicaid in states that adopt the ACA’s Medicaid expansion (without regard to their disability status). While the expansion is mandatory as written in the ACA, the Supreme Court’s 2012 ruling on its constitutionality effectively makes expansion optional for states.33 As of February 2016, 32 states (including DC) have adopted the ACA’s Medicaid expansion34 (Table 8). The expansion only applies to people from ages 18 to 64, so this pathway is not available to seniors.

Qualifying for Medicaid based solely on income as an expansion adult can mean quicker access to coverage, without waiting for a disability determination. States have 90 days to determine Medicaid eligibility in disability-related pathways,35 while real-time eligibility is available in most states in poverty-related pathways.36 If someone who qualifies through the ACA’s expansion group is later determined to be eligible for Medicaid through a disability-related pathway, the person can choose whether to remain in the expansion group or switch to the disability-related group.37 (The ACA did not change the existing disability-related eligibility pathways.) Different benefit packages may be associated with different Medicaid coverage groups so the choice of pathway can be important depending on the person’s needs.38

In states that have not adopted the ACA’s Medicaid expansion, people with disabilities can qualify for Medicaid based solely on their low-income status if they fit into a coverage group but financial eligibility levels for these groups remain low. Under the ACA, as of 2014, all children in families with incomes up to 138% FPL are eligible for Medicaid regardless of whether they have a disability. However, the median financial eligibility for parents in non-expansion states is 42% FPL ($703 per month in 2015), and only one non-expansion state (WI) offers any pathway to coverage for non-disabled childless adults as of January 2016.39

State Option to Adopt Streamlined Renewal Procedures

Over three-quarters of states (42) have opted to use at least one of the ACA’s streamlined processes for Medicaid beneficiaries renewing coverage through an age or disability-related pathway (Table 8). Besides expanding Medicaid, the ACA introduced other reforms that simplify and modernize Medicaid enrollment processes. All states must adopt these reforms for poverty-related coverage groups as of 2014, and states can choose to apply these new processes to age and disability-related pathways as well.40

Among states adopting the ACA’s streamlined eligibility renewal processes for age and disability-related pathways, 28 are sending pre-populated forms to facilitate Medicaid eligibility renewals (Table 8). Additionally, as of 2015, another five states report that they are planning to implement this reform. Sending pre-populated forms can simplify the eligibility renewal process for beneficiaries and help to retain eligible people in coverage, which in turn strengthens continuity of care.

In addition, 34 states offer a reconsideration period, allowing those in age and disability-related pathways to renew coverage without a new application for a certain period of time after termination (Table 8). The reconsideration period is typically 90 days from the date of Medicaid termination, consistent with the ACA’s streamlining reforms, although some states offer a different time period for age and disability-related pathways. If a person whose benefits have been terminated for lack of response to a renewal form does return the form within this time period, eligibility can be renewed without requiring a new application.41

Conclusion

Medicaid is an important source of health and long-term care coverage for over 6 million low-income seniors and more than 10 million children and adults who qualify for Medicaid based on disability. Eligibility criteria for age and disability-related pathways vary by state, subject to federal minimum requirements, with significant variation in financial eligibility standards across states and pathways in 2015. States generally must provide Medicaid to SSI beneficiaries and must offer Medicare Savings Programs to help low income Medicare beneficiaries with out-of-pocket costs. Less than half of the states opt to extend Medicaid above the SSI limit (up to a federal maximum of 100% FPL) for seniors and people with disabilities, while two-thirds of states expand Medicaid for “medically needy” individuals with high medical costs. All states but one provide a special pathway to Medicaid coverage for children with significant disabilities (through a state plan option, waiver, and/or buy-in program) regardless of household income, and over three-quarters of states offer a buy-in program for working people with disabilities.

Long-term care is an important part of Medicaid coverage, as private coverage remains limited and costs are typically higher than what many seniors and people with disabilities can afford to pay out-of-pocket. Forty-four states expand financial eligibility for long-term care services to people with incomes up to 300% of SSI, and nearly all of these states apply the same financial eligibility rules to people seeking institutional services and to those seeking HCBS. Some of the 17 states taking advantage of the Section 1915(i) option, expanded by the ACA, are using it as an independent pathway to Medicaid eligibility, including state plan benefits and HCBS, for people with functional needs who do not yet qualify for an institutional level of care. These policies are examples of strategies that states are using to support people in the community, avoid unnecessary institutionalization, promote beneficiary choice of care setting, and manage program costs.

Looking ahead, the ACA’s impact on Medicaid eligibility for seniors and people with disabilities in several respects remains another important area to watch. First, while the ACA did not change the existing age and disability-related pathways, states may make changes to those options in light of the ACA’s new authority to expand Medicaid to nearly all adults up to 138% FPL. For example, Indiana has eliminated its spend down program (associated with its transition from Section 209(b) to Section 1634 status) since 2014.42 Some people previously eligible as medically needy may become eligible through the expansion or the state’s new Section 1915(i) program targeted to adults with mental health needs. However, seniors are not included in the ACA’s expansion group, and it will be important to determine whether seniors with high medical expenses who were spending down to medically needy eligibility levels will continue to be able to access coverage.

Additionally, it will be important to track state decisions about whether to reduce or eliminate disability-related Medicaid pathways given the availability of Marketplace coverage under the ACA. For example, since 2014, Louisiana reduced the income and asset limits in its Medicaid buy-in for working people with disabilities.43 While this population may be able to access Marketplace coverage with premium tax credits, those plans may not offer all of the services, especially LTSS, that working people with disabilities need and that Medicaid typically provides.44

Another set of policy issues may be raised by the new financial methodology that the ACA requires for poverty-related groups, which prohibits asset tests. The Section 1915(i) HCBS option also does not include an asset test. It remains to be seen whether states will continue to apply optional asset tests in other age and disability-related pathways or whether the trend toward eliminating asset tests will carry over to these groups. As of 2015, eight states do not have asset limits for their Medicare Savings Programs, eight states do not have asset limits for their buy-in programs for working people with disabilities, and one state (AZ) does not have an asset limit for the aged/blind/disabled pathway up to 100% FPL.

Finally, it is notable that over three-quarters of states have chosen to apply at least one of the ACA’s streamlined renewal procedures to age and disability-related pathways which may help to ensure continuity of coverage for eligible beneficiaries. These and other policy changes that states make in the years ahead will be important in assessing the extent to which seniors and people with disabilities can gain and maintain Medicaid eligibility and access to the preventive, physical, behavioral health, and long-term care services that they need.

Introduction Appendix

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