Medicaid Explained

Alternatives to Medicaid are available in some states. Click here for more information.

Medicaid is a federally aided, state-operated program that provides medical care for certain low-income individuals and families who have limited resources. Qualifying for Medicaid is not tied to Social Security benefits; however, if an individual is receiving social security benefits, a part of those funds will go toward your medical expenses. Other than the Social Security benefits deduction, the program provides 100 percent coverage of most medical expenses and does not require payment of premiums or deductibles. In addition, health care providers who accept Medicaid cannot bill for any additional charges as they can with Medicare.

Eligibility and Qualifications

Medicaid qualifications vary from state to state. Medicaid Asset Limitations are based on whether the individual is single, or married with an at-home spouse. Meeting these limitations is the most difficult criteria when applying for Medicaid. For state-specific information about Medicaid benefits The Henry J. Kaiser Family Foundation has made a database available to the public with state-specific Medicaid information for both acute and long-term care coverage.

Single, unmarried individuals cannot have countable assets* that exceed a certain amount. Additionally, those individuals cannot have an income that exceeds a specified amount per month. Similarly, married persons with an at-home spouse cannot have combined countable assets that exceed a certain amount per month. However, the Medicaid applicant is allowed to keep a specified amount of income per month. Please refer to the Medicaid website at for the current limitations.

Countable Assets are defined as:

  • Checking accounts, savings accounts and CDs
  • Investment accounts, including mutual funds, stock and bonds
  • Credit union accounts
  • Certain life insurance policies, based on amount of face value
  • Annuities that have not annuitized (beneficiary not yet receiving payments)
  • Automobiles, if more than one is currently registered
  • Second homes and non-business properties
  • Revocable trust accounts
  • Promissory notes

Exempt Assets are defined as:

  • Primary residence, if applicant is married with an at-home spouse, or if applicant intends to return to home
  • Property used in business or trade
  • Pre-need burial expenses
  • Certain life insurance policies, based on amount of face value
  • IRAs
  • Pensions
  • Annuities, if the beneficiary is receiving payments

Note: Some people confuse Supplemental Security Income (SSI) with Medicaid, because people with SSI automatically have Medicaid. The reverse is not true. SSI is federally funded by tax revenues. It is designed to aid the aged, blind and disabled who have little or no income so they can meet their basic needs for food, clothing and shelter.