Most people in Maryland have probably heard of Medicaid, but very few citizens of the state fully understand how the program works and how a person can obtain benefits. Understanding the basics of Medicaid eligibility can be an important first step in creating an estate plan for individuals with limited financial resources.
The basics of Medicaid
The first step is to distinguish between Medicare and Medicaid. Medicare offers financial assistance to pay for a person’s basic health care needs, and eligibility depends upon a person’s physical condition or age. Anyone who is totally disabled is eligible for benefits under Medicare. At age 65, all Americans are eligible for Medicare benefits, including those who received Medicaid benefits due to a disability. Medicaid, on the other hand, is only available to persons with limited financial means, and eligibility is completely unrelated to a person’s medical condition.
Financial limits on eligibility
Eligibility for Medicaid in Maryland depends upon almost entirely upon a person’s modified adjusted gross income (MAGI). MAGI must be determined according to the rules set forth in the 42 Code of Federal Regulations Sec. 435.603. Financial levels are tied to the federal poverty level (FPL). The income limits are expressed as a percentage of the federal poverty level. For example, an adult is eligible for Medicaid benefits if his or her MAGI is less than 123% of the FPL. Pregnant Women in Maryland can earn up to 259% of the FPL without losing their Medicaid benefits. Children have several different levels of income that determine their Medicaid eligibility, and Maryland provides significant additional benefits under its Child Health Insurance Program (CHIP).
Medicaid as an estate planning tool
Because of the broad eligibility limits on Medicaid in Maryland, the program can be a useful adjunct to an estate plan that may include financially stressed children or other relatives. Anyone who is interested in understanding the uses and benefits of Medicaid may wish to consult an experienced estate planning attorney for advice, an assessment of the individual’s current financial situation and estate plan and assistance with an application for Medicaid benefits.