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Medicaid Financial Eligibility for Seniors and People with Disabilities in 2015

Today, the Medicaid program provides health and long-term care coverage to nearly 70 million Americans with low incomes. They include over 6 million poor seniors and more than 10 million children and adults who qualify for Medicaid based on a disability.1 Medicaid beneficiaries with disabilities include individuals with physical conditions such as multiple sclerosis, epilepsy, and blindness; HIV/AIDS; spinal cord and traumatic brain injuries; disabling mental health conditions such as depression and schizophrenia; intellectual and developmental disabilities such as Down syndrome and autism; and other functional limitations.

Medicaid is important for seniors and people with disabilities because poverty is correlated with both old age and disability status. Most seniors are covered by Medicare, but the program has high out-of-pocket cost-sharing requirements, and many seniors have low incomes and modest savings.2 People with disabilities have limited access to commercial health insurance if they are unable to work at all or work full-time. Additionally, commercial insurance typically does not cover the full scope of services that many seniors and people with disabilities need to live independently in the community. For example, Medicaid is the primary payer for long-term services and supports (LTSS) which provide assistance with self-care and household tasks.3

Medicaid eligibility pathways related to age and disability include certain core groups that all states must cover and an array of additional groups that can be covered at state option (Figure 1). States generally must provide Medicaid to SSI beneficiaries, and states must help low-income Medicare beneficiaries with their out-of-pocket costs through Medicare Savings Programs. States have the option to extend Medicaid eligibility for seniors and people with disabilities above the SSI limit (75% of the federal poverty level, FPL) up to a federal maximum of 100% FPL. States also have the option to cover people with high medical expenses whose income exceeds the limit for other groups through the medically needy pathway. States can elect to cover children with significant disabilities through the Katie Beckett state plan option, a comparable home and community-based services (HCBS) waiver, and/or the Family Opportunity Act buy-in. States also may offer a Medicaid buy-in for working people with disabilities. States can extend financial eligibility for people who need long-term care up to 300% of the SSI level through the special income rule. Most recently, the Affordable Care Act (ACA) provides states with an option to cover people with functional limitations who need HCBS but who do not yet require an institutional level of care.

Figure 1: State Take-Up of Key Medicaid Eligibility Pathways for Seniors and People with Disabilities, 2015

Figure 1: State Take-Up of Key Medicaid Eligibility Pathways for Seniors and People with Disabilities, 2015

The ACA’s Medicaid expansion up to 138% FPL excludes seniors but may provide an additional eligibility pathway for people with disabilities. In addition to expanding Medicaid, the ACA introduced other reforms that simplify and modernize Medicaid eligibility and enrollment processes for poverty-related coverage groups. States can choose whether to apply these new processes to age and disability-related pathways.

This report describes state variation in financial eligibility criteria and adoption of different options in the major Medicaid state plan eligibility pathways related to age and disability.4 It also discusses how the ACA’s Medicaid expansion affects eligibility for people with disabilities, describes optional state take-up of the ACA’s streamlined eligibility renewal procedures for age and disability-related pathways to date, and identifies issues to watch related to state policy changes in these areas.

The findings are based on data collected through a survey of all 50 states and the District of Columbia conducted by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured from July through October 2015.5 Two states, Maine and Rhode Island, did not respond to the survey, and data for these states were obtained by researching state Medicaid websites and the CMS website. Additional detail about selected pathways is provided in the Appendix.

Medicaid eligibility for seniors and people with disabilities includes two general components: financial eligibility rules that limit income and sometimes assets, and functional eligibility rules that determine the degree of a person’s need for services and supports. State variation in functional eligibility criteria associated with disability-related pathways and a detailed discussion of Medicaid Section 1915(c) HCBS waivers are beyond the scope of this report.