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Understanding Medicaid: A Comprehensive Guide

If you’re young, healthy, and employed, you likely receive health insurance through your employer or your spouse’s employer. However, for more vulnerable populations, the government offers affordable, subsidized health care coverage. One such program is Medicaid.

How Does Medicaid Work?

Medicaid is a government health insurance program designed for low-income individuals and those with certain disabilities. Funded jointly by the federal government and the states, Medicaid is the largest source of health coverage in the U.S., covering 87 million people. However, it is administered at the state level, so programs and eligibility requirements vary from state to state.

Who Qualifies for Medicaid?

Medicaid has strict eligibility requirements, targeting those with limited resources. Federally, the following groups are eligible:

• Low-income families
• Qualified pregnant women and children
• People receiving Supplemental Security Income (SSI)
• People with disabilities

States may also offer coverage to other groups, such as children in foster care and individuals receiving home and community-based services. Eligibility also requires U.S. citizenship or an eligible immigration status. You can complete an online screening on HealthCare.gov to determine your eligibility.

Income Limits for Medicaid

The federal poverty level (FPL) is used to calculate Medicaid eligibility, though many states use a higher threshold to extend coverage. In states with expanded Medicaid, you can qualify based on income alone if your household income is under 138% of the FPL. Here are the annual income limits based on household size:

Family Size	2023 Income Limit
1	$20,120
2	$27,214
3	$34,307
4	$41,400
5	$48,493
6	$55,586
7	$62,680
8	$69,773

Note: Income limits are higher in Alaska and Hawaii. Some states may offer Medicaid to individuals with significant health conditions under a “medically needy program,” even if their income is too high to otherwise qualify.

What Counts as Income?

To determine Medicaid eligibility, the government uses modified adjusted gross income (MAGI). This includes:

• Federal taxable wages, tips, and self-employment income
• Nontaxable Social Security benefits
• Retirement or pension income
• Capital gains, investment income, and rental income
• Unemployment compensation
• Untaxed foreign income

MAGI does not include Supplemental Security Income, gifts, workers’ compensation, veterans’ disability payments, or child support.

Medicaid vs. Medicare: What’s the Difference?

Medicaid is a joint state and federal program aimed at providing care for low-income individuals and those with disabilities. It offers free or low-cost coverage, with no enrollment fees or premiums, and usually no fees for covered medical expenses. Medicare, on the other hand, is a federal program available to all Americans aged 65 and older, as well as some younger individuals with specific conditions. Unlike Medicaid, Medicare requires participants to pay premiums, deductibles, and copays.

How to Apply for Medicaid

Medicaid applications are handled at the state level. You can apply through your state’s Medicaid agency or via the federal health insurance marketplace at HealthCare.gov. If you apply through the marketplace, your application will be forwarded to your state’s Medicaid agency for review. You can also call the marketplace at 800-318-2596, or for TTY users, 855-889-4325.

The Bottom Line

Medicaid can be a lifesaver for those who qualify, providing access to essential health care services. Even if you’re unsure about your eligibility, it’s worth applying to find out, as you might qualify for other money-saving programs.

For any mortgage-related needs, feel free to call O1ne Mortgage at 213-732-3074. We’re here to help you navigate your financial journey with confidence.

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