Medicaid Financial Eligibility for Seniors and People with Disabilities: Findings from a 50-State Survey
Medicaid is an essential source of coverage for medical and long-term services and supports (LTSS) for many seniors and nonelderly adults and children with disabilities. Aside from the core group of SSI beneficiaries, pathways to full Medicaid eligibility based on old age or disability are provided at state option. This issue brief presents the latest state-level data on Medicaid financial eligibility criteria and adoption of key age and disability-related pathways (Figure 1). It also analyzes state choices about whether to adopt these optional age and disability-related pathways in light of states’ Affordable Care Act (ACA) expansion status. Findings are based on a survey of the 50 states and the District of Columbia. Appendix Tables contained detailed state-level data. Key findings include the following:
- While adoption of the major optional age and disability-related Medicaid eligibility pathways varies substantially across states, state choices about these pathways have remained stable since the time of our last survey in 2015. All states except Alabama elect at least one state plan optional pathway to full Medicaid eligibility based on old age or disability.
- The income limits associated with the age and disability-related pathways vary across states but generally remain low, with a notable minority of states opting to eliminate asset tests in certain pathways. The median income limit was 74% of the federal poverty level (FPL, $771/month in 2019) for individuals eligible based on old age or disability, 48% FPL ($500/month) for individuals eligible as medically needy, and 250% FPL ($2,602/month) for working people with disabilities. All states except Tennessee offer the Katie Beckett state plan option or a comparable waiver to cover at least some children with significant disabilities regardless of household income.
- Greater shares of states that have adopted the ACA Medicaid expansion also have adopted key optional age and disability-related pathways, compared to non-expansion states. Since the time of our last survey in 2015, expansion states generally have not scaled back age or disability-related pathways, while non-expansion states generally have not increased eligibility in age and disability-related pathways.
- All states elect at least some options to expand financial eligibility for Medicaid LTSS. While most states apply the same rules regardless of care setting, there are a few states in which financial eligibility rules for home and community-based services (HCBS) are more restrictive and could be aligned with rules for institutional care to eliminate programmatic bias and increase community integration. Nearly all states are applying the spousal impoverishment rules to HCBS as required by ACA Section 2404; these rules protect a portion of income and assets to support a spouse when an individual receives Medicaid LTSS. However, five states report plans to scale back or stop doing so and more could follow if Congress allows Section 2404 to expire on September 30, 2019.
- All states offer Medicare Savings Programs (MSPs) in which Medicaid covers some or all out-of-pocket costs for low-income Medicare beneficiaries. Few states expand MSP financial eligibility beyond the federal minimum limits, although nine states have opted to eliminate MSP asset limits.
- An increasing number of states are opting to apply the ACA’s streamlined eligibility renewal provisions to age and disability-related pathways, which can help retain eligible people in coverage and strengthen continuity of care. Thirty states now use prepopulated forms to facilitate eligibility renewals and 43 states offer reconsideration periods for these pathways.
Looking ahead, state and federal policy choices that affect Medicaid eligibility for seniors and people with disabilities will remain important areas to watch. As more states have adopted the ACA Medicaid expansion, state choices about optional age and disability-related pathways generally have remained stable. Expanding coverage for children with significant disabilities is the subject of recent legislation in Louisiana and Tennessee. States’ progress in advancing community integration could be at risk if spousal impoverishment rules are scaled back for HCBS but remain in place for institutional care if Congress allows ACA Section 2404 to expire this fall. In addition, Medicaid eligibility in age and disability-related pathways could be affected by a change to the inflation measure that is used to determine the annual federal poverty line, which the federal government is considering. Using a lower inflation measure would result in smaller increases in the poverty line each year compared to the current measure, which would slow the annual increase in Medicaid income limits based on the FPL over time, with fewer people eligible for Medicaid as a result. These and other policy changes in the years ahead will influence the extent to which seniors and people with disabilities can gain and maintain Medicaid eligibility and access to needed preventive, physical, behavioral health, and long-term services and supports.