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Medicaid and the CHIP (Children's Health Insurance Program)

Questions answered

Medicaid and CHIP

Medicaid and CHIP are federal and state partnership programs designed to provide coverage to lower income individuals and children. These programs provide safety net coverage for the country’s lowest income populations. Like Marketplaces, these programs vary by state. A person who is eligible for Medicaid or CHIP is also eligible to enroll in a qualified health plan (QHP), but such coverage cannot be supported with advance payments of the premium tax credit or cost-sharing reductions. This is because Medicaid eligibility will affect an individual’s eligibility to receive advance payments of the premium tax credit and cost-sharing reductions for coverage purchased through the Individual Marketplace. 

The single streamlined application required by the Affordable Care Act will streamline eligibility determinations for:

  • Enrollment in a QHP through the Marketplace
  • Insurance affordability programs

Medicaid

Medicaid is a federal and state partnership to provide coverage for some people with lower incomes, older people, people with disabilities, and some families and children. To qualify for Medicaid, an individual must be part of a covered group – children, pregnant women, parents or caretaker relatives, the elderly, the disabled, or other non-elderly adults who are not eligible for or enrolled in Medicare – and must meet financial eligibility requirements. To be eligible for Medicaid, individuals need to satisfy federal and state requirements regarding residency, citizenship or immigration status, and household income.

Medicaid is jointly funded through federal and state dollars, but administered at the state level. State-based Medicaid programs often have different names in each state, like “MassHealth” in Massachusetts, and “SoonerCare” in Oklahoma. It is important to be familiar with the program in any state in which you operate. The Affordable Care Act significantly streamlines the eligibility standards and enrollment processes for Medicaid.

CHIP

CHIP provides no-cost or low-cost health insurance coverage to children in families that have too much income to qualify for Medicaid coverage, but that cannot afford to purchase private health insurance. It also covers pregnant women in some states. Like Medicaid, the costs for CHIP are shared by the federal government and state governments but the program is administered at the state level. CHIP programs operate under different names in each state, such as “BadgerCare” in Wisconsin and “Washington Apple Health for Kids” in Washington State.

To find CHIP information by state, visit InsureKidsNow.gov

Medicaid Eligibility Expansion

The Affordable Care Act, through Medicaid expansion, provides new opportunities for adults in some states to be covered by Medicaid. The Affordable Care Act specifies that, as of January 1, 2014, Medicaid will cover all non-elderly individuals who are ineligible for Medicare and have household income at or below 138% of the Federal Poverty Level (FPL), which for 2013 is $11,490. That translates into an annual income of approximately $15,856 for an individual and $32,499 for a family of four, in 2013.

However, some states have chosen not to expand Medicaid eligibility to these income levels. Regardless of whether a state chooses to expand its Medicaid eligibility, effective January 1, 2014, all state Medicaid programs will:

  • Use a new income methodology for the majority of applicants, called modified adjusted gross income (MAGI), which we will discuss on the next page
  • Not consider assets in determining eligibility for individuals whose financial eligibility is based on MAGI
  • Streamline income-based rules, systems, and verification procedures

 

A Simplified Calculation of Income

The Affordable Care Act requires all states to determine eligibility for Medicaid and CHIP for the majority of individuals (essentially, all non-disabled, non-elderly individuals) based on their modified adjusted gross income (MAGI). The MAGI calculation equals adjusted gross income as defined by the Internal Revenue Service (IRS), plus any foreign income, tax-exempt interest, and non-taxable Social Security benefits. Assets will not be considered in determining eligibility. This is the same income methodology that will be used for determining eligibility for the premium tax credit and cost-sharing reductions, with the following exceptions:

  • In limited cases, the set of individuals whose income is counted in determining eligibility for Medicaid and CHIP may be slightly different from the set of individuals counted for premium tax credits and cost-sharing reductions.
  • Medicaid and CHIP disregard certain rare types of income.
  • Medicaid and CHIP eligibility is primarily based on current monthly income, while eligibility for premium tax credits and cost-sharing reductions is based on projected annual household income.

Eligibility for Medicaid and CHIP

Medicaid eligibility determinations are made at the state level. The level of Medicaid assistance available is also determined at the state level. 

When individuals go to the Marketplace for coverage or financial assistance, the Marketplace will first assess their eligibility for Medicaid or CHIP. Individuals who are eligible for Medicaid may also enroll in a QHP available through a Marketplace. However, this approach would not normally be in the person’s financial best interests, since they would not be eligible to receive either the premium tax credit or cost-sharing reductions and would be required to pay full premiums.

Marketplace QHPs are generally not intended for individuals who are eligible for or enrolled in other types of minimum essential coverage outside of the Marketplace—such as employer-based coverage, Medicare, Medicaid, CHIP, TRICARE, and certain other types of coverage.

Medicaid and CHIP Eligibility Determinations

As is the case for health insurance programs under the Marketplace, agents and brokers cannot make Medicaid or CHIP eligibility determinations.

In some states, the Marketplace makes final eligibility determinations for Medicaid and CHIP.

In other states, the Marketplace may conduct assessments of eligibility for Medicaid and CHIP and the state Medicaid and CHIP agencies make the final Medicaid and CHIP eligibility determinations, consistent with Medicaid and CHIP regulations and state-specific policies. In these states, there is a possibility that the Medicaid agency will disagree with the Marketplace’s assessment, in which case the application will be returned to the Marketplace for further processing.

State Differences in Medicaid and CHIP Eligibility

Assessments will be made based on each state’s applicable Medicaid MAGI-based income standards, other eligibility requirements, citizenship and immigration status, and verification rules and procedures, consistent with federal regulations.

As Medicaid programs vary by state, you should familiarize yourself with the Medicaid program for the state(s) in which you reside. Additional information is available through your state Medicaid office; or to learn more about a state Medicaid program and other available options, use the insurance and coverage finder on Healthcare.gov or visit Medicaid.gov. For state-specific CHIP program information, visit Medicaid.gov or InsureKidsNow.gov

Next Topic: The MarketPlace

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Agents and Brokers are required to be trained to assist consumers with the application and decision making process. Using an Agent to enroll in a ObamaCare Health Plan will be the primary choice of many americans. After all agents have the inside track on companies and their promptness to handle claims and pay benefits in atimely fashion.

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We offer a free consultation which entails speaking one on one with a knowledgable Agent that has been state licensed and trained to answer your questions.

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