Who's eligible for Medicaid?
To receive federal funding for Medicaid, states must cover certain "mandatory" populations, including:
- Children 18 and younger in families whose modified adjusted gross income (MAGI) is below 138% of the federal poverty line. For a family of three in 2023, that translates to an income of $34,307 or less in all states other than Alaska and Hawaii.
- People who are pregnant whose income is below 138% of the federal poverty line. In 2023, a single person meets this requirement if their income is $20,120 or less in all states except for Alaska and Hawaii.
- Some parents and caregivers with low incomes.
- Most seniors and people with disabilities receiving Supplemental Security Income (SSI) cash assistance.
To qualify for Medicaid, you also need to be a resident of the state where you apply. Generally, coverage is only available to U.S. citizens or qualifying noncitizens.
Most states also have limits on what are called countable assets, i.e., money in checking and savings accounts, certificates of deposits (CDs), and investment accounts, for people who need Medicaid to cover long-term care. Often, countable assets can't exceed $2,000 for a single person or $3,000 for a married couple. Depending on the state, retirement accounts may or may not be considered countable assets, but even when they don't count toward the asset limit, distributions can push you over Medicaid's income limits. Usually, home equity in a primary residence, your primary vehicle, and some personal property is off-limits, though.
Medicaid's asset limits are essential to consider in financial planning, as we'll discuss in the next two sections. That's because Medicaid foots the bill for roughly 62% of long-term care in the U.S.
