Qualifying for Medicaid is not as straightforward as you may think, at least not anymore.
How you qualify for Medicaid affects how the government looks at your finances.
Understanding the difference may be essential to protecting your assets in the long run.
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After the law was enacted, however, eligibility was split into two distinct groups.
Understanding MAGI is as straightforward as your tax return which means it can get confusing.
This is what you gotta know.
Gross Income
Your gross income is your total earned income.
People who live or work abroad may take advantage of a foreign income exclusion on their U.S. tax returns.
Essentially, this adds back certain deductions from the AGI.
For most people, the AGI and MAGI will be the same.
When it comes to Medicaid eligibility, however, MAGI has two components.
The first is your household income, and the second is the size of your household.
SSI sets the standard.
If your income and assets are above a certain level, you will not qualify for the program.
MAGI Medicaid does not cover everything.
Not everything you own will count toward your assets.
Assets
These are the most common assets to consider, although this list is far from exclusive.
These asset limits can also be referred to a resource limit.
It is important to understand what is countable and does not count toward this limit.
Bank Accounts and Cash
Your first $2,000 is yours and yours alone.
Medicaid will only count any dollars above this amount.
Funeral and Burial Funds
The government allows some dignity when it comes to death and dying.
Funds used topre-arrange a funeral or memorialare excluded from your Medicaid assets.
This includespre-purchased burial plots, not only for you but for your immediate family.
Insurance Policies
Not all insurance policies are created equal.
Term life policies pay a benefit when you die but do not accrue cash value while you are alive.
Other types of policiespermanent, universal, variable, or whole life insurance policiesearn cash value over time.
These are the ones Medicaid directs its attention.
Additional properties may be excluded from the asset test.
Consider farms, rental properties, and other real estate investments in this category.
Your first vehicle will not count toward the asset limit.
Be sure to check with your local Medicaid office.
Medically Needy Populations
Some people may not qualify for Medicaid upfront.
However, they may still be able to qualify if they have medical need.
Many states offer medically needy programs for people who spend a significant portion of their income on medical expenses.
This may require that they provide copies of bills and receipts at regular intervals.
A spend-down program may allow these medical expenses to be subtracted from their income during that period of time.
In that way, their income may then be decreased enough to qualify for Medicaid the traditional way.
just check with your local Medicaid office to find out what options are available in your state.
Taking Advantage of MAGI
The Affordable Care Act simplified Medicare eligibility and enrollment for millions of Americans.
Using MAGI for eligibility simplified the software process.
The administrative burden of confirming assets was put to the wayside.
Unfortunately, it also gave wealthy people the opportunity to take advantage of taxpayer dollars.
This is the case even when they could easily dip into their assets to pay for health insurance.
Keep an eye out for potential Medicaid reforms in the future that could address this issue.
Summary
Medicaid eligibility can be a complicated issue.
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What Is Modified Adjusted Gross Income?
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