Some states have given the Medicaid program a different name. For example, California's Medicaid program is called Medi-Cal, and the Medicaid program in Massachusetts is called MassHealth.
State Medicaid programs can deny coverage for a particular treatment if the treatment isn’t “medically necessary.” And each state can define medical necessity differently. But no matter where you live, your treating physician's opinion about whether a particular treatment is medically necessary will be the most important factor in getting Medicaid to pay for the treatment.
Below, we'll discuss the eligibility requirements for Medicaid and how some states define medical necessity.
Each state has its own eligibility rules for Medicaid, but some standard features exist. In any state, you must first financially qualify for the Medicaid program and then medically qualify for specific Medicaid services. (The state must deem the services “medically necessary,” or the state Medicaid program won’t pay for them.)
You must generally have a low income and very few assets to qualify for Medicaid. However, not everyone with a low income and few assets qualifies for the program. Eligibility for Medicaid varies, but in many states, it’s based at least in part on whether:
Disability. If you have disabilities, you’ll still have to meet your state’s income and asset requirements. But in most states, you’ll automatically qualify for Medicaid if you receive Supplemental Security Income (SSI) disability benefits.
Women. Pregnant women who meet the income and asset requirements will qualify for Medicaid. And children are automatically covered for one year after they’re born to mothers receiving Medicaid. Many states provide coverage to pregnant women with higher income and assets than is typically allowed for Medicaid eligibility.
Women with breast or cervical cancer can obtain treatment through a special Medicaid program for those diseases. Many states offer this coverage to women at higher income levels, too.
Adults with children. Most states offer Medicaid to low-income adults with children, although there’s no uniform income standard for that coverage. In addition, most states expanded their Medicaid programs under the federal Affordable Care Act. In states that opted into the "Medicaid expansion," adults under 65 with incomes at or below 133% of the poverty level (about $20,000 for an individual) can qualify for Medicaid, even if they don't have children and aren’t pregnant or disabled.
Medically needy. About three-quarters of the states also allow those who don't fit under Medicaid's traditional income and resource guidelines but are "medically needy" to qualify for Medicaid. You’re considered medically needy if your medical expenses are so high that they would reduce your income or assets to eligible levels. Learn more in our article on Medicaid’s medically needy program.
Children with higher income. Children in households with incomes too high to qualify for Medicaid but not high enough to afford private insurance might be covered by their state's Children's Health Insurance Program (CHIP). Each state has its own rules about who can qualify for CHIP, with most states' eligibility guidelines falling between 200% and 400% of the federal poverty level. In 2024, that's around $62,000 to $125,000 per year for a family of four—more if you live in Alaska or Hawaii.
Medicaid recipients must show that the particular service they want Medicaid to pay for is medically necessary. The medical necessity requirement is intended to prevent Medicaid from paying for elective treatments and procedures. Many states give the opinion of the treating physician a good deal of weight in deciding whether to approve a service.
There's no federal definition of medical necessity; each state has defined the term for its Medicaid program. For example, Florida limits patients to the least expensive treatment that’s effective.
Other common restrictions that are part of many states' definitions of medical necessity include:
Other states define medical necessity more broadly. For example, California's Medi-Cal program defines a treatment as medically necessary when it’s reasonable and necessary to do the following:
Regardless of the state where you live, if your doctor doesn't think the treatment is medically necessary, Medicaid isn’t likely to agree to pay for it.
You must be a U.S. citizen or a lawful permanent resident to receive Medicaid. And you’ll need to show proof of your citizenship or immigration status and your identity to qualify.
But there’s an exception to the citizenship requirement for people with emergency medical conditions, including pregnant women in labor. Specific coverage can vary from state to state, as each state can define “emergency medical conditions” as it chooses.
Some states offer more Medicaid coverage to non-citizens than other states. For example, some states, like California, offer coverage of prenatal expenses (non-emergency care for pregnant women) regardless of citizenship or immigration status, through the Medi-Cal Access Program.
Each state can determine what services its Medicaid program will pay for, but some services must be covered under federal law. Mandatory covered services include the following:
In addition to the mandatory covered services, some states have chosen to provide Medicaid coverage for things like:
Even though Medicaid might cover these services, Medicaid recipients sometimes have trouble getting certain services because no providers in their area accept Medicaid. For example, in many rural areas, there are no dentists who accept Medicaid, so children receiving Medicaid might not have access to dental care.
Today, many Medicaid recipients get their services from managed care organizations, which are private companies that states have hired to deliver medical services according to Medicaid guidelines. Other Medicaid recipients still get "fee-for-service" Medicaid—meaning that the state pays the Medicaid recipient’s health care provider directly.
No matter your state, Medicaid is supposed to provide affordable health care for those with low incomes. So, medical services provided through Medicaid have an extremely low cost or sometimes are free.
You can apply for Medicaid through the health insurance marketplace in your state (or healthcare.gov) or by contacting your state's Medicaid agency directly. Find the website and contact information for your state's Medicaid agency using the map at Medicaid.gov.
You have a right to appeal if your Medicaid application is denied for any reason. The deadlines and procedures for appealing should be described in your written denial notice from your state's Medicaid office. For more information, see Nolo's article on appealing a Medicaid denial.
Many legal aid offices provide free legal assistance for applicants denied Medicaid. Contact information for your local legal aid office can be found at the Legal Services Corporation's website.
Updated March 22, 2024
]]>For example, if you file a legal claim after a car accident, you may need to prove that the accident—and not some pre-existing medical condition—caused your injuries. Or the extent of your injuries may be in dispute. And medical malpractice claims often hinge on interpretation of the plaintiff's medical records.
Outside of the legal realm, patients sometimes need their medical records to provide them to a specialist or new doctor. Read on to learn about your right to obtain your medical records, and how to go about getting them.
The federal Health Insurance Portability and Accountability Act (HIPAA) gives patients the right to obtain a copy of their medical records from most health plans and health care providers, with a few exceptions.
According to HIPAA, you may request:
Your own medical records. You can submit a request to access or obtain your own "protected health information" (medical records), or direct the health care provider to transmit your records to a designated third party.
Someone else's records, if you're a designated representative. You may request someone else's medical records if they give you permission, in writing, to act as their representative (in a power of attorney or similar document). For example, if your elderly parents designate you as their representative, medical providers must provide you with your parents' medical records if you make a request to obtain them.
Someone else's records, if you're their legal guardian. Likewise, if you are appointed as the legal guardian of another adult, you have the legal right to get that person's medical records. Learn more about adult guardianships and conservatorships.
Your children's medical records, with some exceptions. For the most part, parents and legal guardians can obtain their children's medical records. There are a few exceptions to this rule. A parent might not get access to a child's records if:
Records of deceased persons in certain circumstances. If you're the personal representative of an estate—either designated by a will or appointed by a court to settle a deceased person's affairs—HIPAA gives you access to the deceased's medical records. In addition, if you're related to a deceased person and certain information in that person's medical file relates to your own health, HIPAA lets you access that information.
HIPAA gives patients the right to get copies of all of their medical records. Patients also have the right to view—usually at the medical provider's offices—their original medical records.
HIPAA does allow health care providers to withhold certain types of medical records, including:
Usually, if the provider denies your request for medical records, it must provide you with a denial letter. In some cases, you may be able to appeal the denial.
HIPAA requires medical providers to provide copies of medical records within 30 days of your request. If it will take more than 30 days to meet your request, the medical provider must give you a reason for the delay.
Some states require a quicker turnaround. For example, in California, providers must allow patients to see their records within five days of the request, and must provide copies of those records within fifteen days.
No insurance company (whether it's yours or someone else's, like the other driver's insurer after a car accident) has the legal right to obtain your medical records without your consent and authorization. You have a near-total right of privacy when it comes to who can or cannot see your medical records.
But if you're making an insurance claim in which you're seeking compensation for injuries or some other health issue (like a car insurance claim), you're placing your current health and wellness at issue, and the insurance company almost certainly won't offer you a fair injury settlement without reviewing your medical records. In this situation, most insurance claimants will obtain the relevant medical records and transmit them to the insurance company (making sure what's sent over is limited to what's relevant to the claim).
If a lawyer is representing you as part of your insurance claim or lawsuit, the standard course of action in this situation is for you (the client) to complete an "authorization for the release of medical records" or similarly-named form, giving your lawyer the legal right to obtain medical records related to your case.
Learn more about insurance company requests for medical records and medical exams in an injury claim.
]]>The following frequently asked questions give you an idea of what Medicare Part A pays for, and does not pay for, during your stay in a participating hospital. However, even when Part A covers a cost, there are significant financial limitations on the length of coverage, as you'll see below.
When you're admitted to a hospital or skilled nursing facility, Medicare Part A hospital insurance will cover the following for a certain amount of time:
Medicare Part A hospital insurance doesn't cover:
Medicare doesn't cover 100% of hospital bills. Medicare Part A pays only certain amounts of a hospital bill for any one "spell of illness." And for each spell of illness, you must pay a deductible before Medicare will pay anything. In 2024, the hospital insurance deductible is $1,632.
For the first 60 days you're an inpatient in a hospital, Part A hospital insurance pays all of the cost of covered services (after you pay the deductible).
After your 60th day in the hospital, each day you must pay what's called a “coinsurance amount” toward your covered hospital costs, and Medicare will pay the rest of the covered costs. Here's what you'll pay in 2024:
If you're in the hospital for more than 90 days during one spell of illness, you can use up to 60 additional "lifetime reserve" days of coverage. You don't have to use your reserve days in one spell of illness; you can split them up and use them over several benefit periods. But you have a total of only 60 reserve days in your lifetime.
(Note: If you have a Medicare Advantage Plan, called Medicare Part C, you may not have to pay the deductible and coinsurance amounts for hospital stays.)
A spell of illness, called a "benefit period," refers to the time you're treated in a hospital or skilled nursing facility, or some combination of the two. The benefit period begins the day you enter the hospital or skilled nursing facility as an inpatient and continues until you've been out for 60 consecutive days.
If you're in and out of the hospital or nursing facility several times but haven't stayed out completely for 60 consecutive days, all your inpatient bills for that time will be figured as part of the same benefit period (even if you're readmitted for a different illness or injury).
Medicare also covers other types of facilities and services, but only in some circumstances. Here's a summary:
Under some circumstances, Medicare will cover some of the cost of inpatient treatment in a skilled nursing facility or visits from a home health care agency. Your stay in a skilled nursing home facility or home health care is covered by Medicare Part A only if you've spent three consecutive days, not counting the day of discharge, in the hospital. Your skilled nursing stay or home health care must begin within 30 days of being discharged from the hospital.
For more information, see our articles on Medicare coverage of skilled nursing facilities and Medicare coverage of home health care.
Medicare Part A hospital insurance covers a total of 190 days in a lifetime for inpatient care in a specialty psychiatric hospital (meaning one that accepts patients only for mental health care, not just a general hospital).
If you're already an inpatient in a specialty psychiatric hospital when your Medicare coverage goes into effect, Medicare may retroactively cover you for up to 150 days of hospitalization before your coverage began. In all other ways, inpatient care in a psychiatric hospital is governed by the same rules regarding coverage and copayments as regular hospital care.
There's no lifetime limit on the coverage for inpatient mental health care in a general hospital. Medicare will pay for mental health care in a general hospital to the same extent as it will pay for other inpatient care.
Hospice provides an alternative to the traditional medical care that hospitals and nursing facilities commonly deliver toward the end of a patient's life. In hospice, the goal is shifted from attempting to cure an illness or performing life-saving measures to keeping a patient as comfortable and free of pain as possible. Before hospice care can begin, a doctor must certify that a patient has a terminal illness and will probably have six months or less to live.
Medicare Part A will pay for hospice care provided by a Medicare-certified program in the following circumstances:
If hospice care will be received at home, caregivers should find out the amount of services that will be provided before agreeing to give up standard medical benefits; sometimes nursing and other services provided in the home environment are quite limited, such as one hour every other day.
Patients may be personally responsible for paying for:
Medicare generally covers a total of 210 days of hospice care, broken into two 90-day periods of benefits, followed by a 30-day period. Each of the periods may be extended, but only when a doctor recertifies that the patient's condition remains terminal.
Most people don't pay premiums for Part A, including people who are receiving Social Security disability benefits. But if you didn't work for 10 years (40 quarters) in a job paying Medicare taxes, you might have to pay a monthly premium. The premium is between $278 (if you have 30-39 work credits) and $505 (if you have fewer than 30 work credits).
If you pay for Part A hospital insurance, you must also enroll in Part B medical insurance, for which you pay an additional Part B monthly premium.
If you have low-income and eligible for the Qualified Medicare Beneficiary (QMB) cost-reduction program, administered by your state's Medicaid program, it will pay for your Part A premium.
Updated February 29, 2024
]]>Given the ambition and scope of the new health care reform bill (it checks in at more than 2,300 pages), understanding what's in store can be complicated. So, while the ink is still drying on the new law -- and keeping in mind that changes to its key provisions aren't out of the question -- let's take a look at ten things you need to know about the new health reform law.
The crux of the new health care law is this: by 2014, all citizens and legal residents in the United States will be required to have at least basic health insurance coverage, and those without coverage will be subject to a phased-in tax penalty that goes up every year a person isn't covered. The penalty won't go into effect until 2014, and a person would be penalized only after going more than three months without insurance. The penalty won't exceed the cost of a basic health plan.
Since its estimated that 95% of people in the U.S. will have health insurance under the new law, you may be wondering about the remaining 5%. Certain groups will be exempted from the mandatory insurance requirement, including illegal immigrants, people in jail or prison, members of Native American tribes, people with very low income, and people with religious objections.
As of 2019, however, the part of the law requiring you to pay a penalty if you don't have coverage is repealed. So, beginning with the 2019 plan year (for which you’ll file taxes in April 2020), the penalty is no longer applicable.
If you're currently insured -- you're covered through an employer's plan, for example -- proponents of the new health care law are stressing that you'll be able to keep the coverage you have. You won't need to find a new doctor or make any other changes to your health insurance plan, and your costs won't go up under the provisions of the new health care law. In fact, if you currently pay for all or part of your plan coverage (through monthly premiums, for example), your costs could actually decrease, according to estimates from the Congressional Budget Office -- in part because the new health coverage mandates should lead to increased competition among insurance companies.
Starting in 2014, U.S. citizens and legal residents will be able to buy health insurance through a new system of exchanges run by state government agencies or nonprofits (these exchange programs are officially called "American Health Benefit Exchanges"). Families and individuals whose income is on the lower end of the scale -- up to four times the federal poverty level -- will be entitled to credits and subsidies to help with some or all of the costs for coverage.
The amount that an individual or family will need to pay for health coverage will be based on total income -- the more you make, the more you'll pay for coverage. The CBO estimates that 20 million individuals and families will be entitled to receive subsidized health insurance under the new law.
Beginning in 2014, employers that have 50 or more workers will be required to offer health insurance to their employees or incur a hefty fine. If any worker -- even just one -- ends up getting coverage that is subsidized by the federal government, the employer will owe a $2,000 penalty for every full-time employee on the payroll.
Many employers (those with 100 employees or fewer) will be able to buy health coverage for their employees under the Small Business Health Options Program (SHOP) Exchanges, which will be run by state government agencies or nonprofits. Smaller employers (those with 25 employees or less) can get a phased-in tax credit based on the business's contribution to payment of employees' health insurance premiums.
The new health care law gives specific protections to children and adults who are in danger of being denied health insurance coverage because of a preexisting medical condition -- which can include anything from asthma to diabetes and heart disease. Under the new rules, insurance companies cannot deny coverage to children due to a preexisting medical condition (beginning six months after the bill's enactment). And by 2014, no one with a preexisting medical condition can be denied health insurance coverage.
The new health care bill expands Medicare coverage to all individuals and families whose income is at or less than 133% of the federal poverty level -- and the federal government will pay all costs of coverage for those who are newly Medicare-eligible, through 2016. By 2014, adults without children will be entitled to Medicaid coverage for the first time in the program's history.
Under the new health care law, parents will be able to include their older children on a group health insurance plan until the children are 26 years old. The child does not need to be a full-time student -- or be claimed as a dependent on the parent's income tax return -- in order to qualify. But since there are no restrictions on how much the parent (as the group health plan participant) may need to pay to get coverage for an older child, group plan administrators (employers) may end up passing most or all of the coverage costs along to the parent.
Costs for implementing the new health care bill should top out at more than $900 billion by the year 2021, the CBO says. It will be paid for in a number of ways, including:
Even though it's been signed by President Obama and Congress has already agreed to some early modifications to the bill, health care reform -- and the debate over it -- isn't a done deal.
Critics of the new health care bill have objections that range from the theoretical to the practical. Some say the federal government has no business mandating and subsidizing health care for individuals. Others worry about the impact of treating the more than 30 million new patients who will enter the health care system in the next ten years -- with concerns ranging from a potential shortage of primary care physicians to patients having a tougher time finding a doctor (and spending more time in the waiting room once they do).
Stay tuned to Nolo.com for the latest updates on health care reform.
Originally Posted: October 2011
Updated: July 2019
]]>The federal Health Insurance Marketplace, which is also called the “Marketplace” or “Exchange,” is the website where individuals can browse various health care plans available under the Affordable Care Act, commonly known as “Obamacare,” as well as compare them, and purchase health insurance. Some states, like California, offer their own Marketplace. If your state isn't offering its own Marketplace, you can use the federal Marketplace.
The health insurance plans are offered by private companies but are all required to offer all essential health benefits, such as hospital care, outpatient services, emergency services, maternity care, mental health and substance abuse treatment, prescription drug coverage, lab services, and rehabilitative services.
Generally, you have to enroll during the Open Enrollment Period. Though, you might qualify for a Special Enrollment Period if you’ve gone through a major life event like losing other coverage, getting married, or having a baby.
A “premium tax credit” is a credit you can use to lower your monthly insurance payment when you enroll in a plan through the Marketplace. As originally designed, the premium tax credit was only for low- and moderate-income people whose household income was between 100% and 400% of the federal poverty level (FPL). However, Congress removed the 400% of FPL limit for limit for 2021 through 2025.
From 2021 through 2025, Americans who earn over 400% of the federal poverty level don't have to pay more th
If you are offered health coverage through your employer, you can purchase a policy through the Health Care Marketplace, but you are eligible for subsidies only if your employer-provided insurance isn’t affordable based on certain criteria. If you don't qualify for your employer's insurance because you work part-time, you can get health coverage through the Marketplace.
The four different categories of insurance plans available through the Marketplace are Platinum, Gold, Silver, and Bronze. All of the categories’ plans provide the same essential health benefits. The quality of care provided, or the access to doctors, doesn't vary between plan types. The various categories differ by the types and amount of costs you’ll pay.
A Platinum plan’s premium is the highest, but you’ll have lower out-of-pocket costs, like copays for visiting the doctor and for prescription drugs. A Bronze plan’s premiums are the lowest, but you’ll have higher out-of-pocket costs. The Gold and Silver plans are in between.
A preexisting condition won’t keep you from getting health coverage. As of January 1, 2014, no insurance company can exclude you from coverage because you have a chronic or disabling illness or injury because you’ve received recent treatment for a medical condition. An insurance company also can’t charge you more if you have a preexisting condition.
That said, if you currently have an individual plan that excludes preexisting conditions, that plan doesn’t have to change its rules. (This kind of individual health insurance policy is a policy that you purchased for yourself, or your family, on or before March 23, 2010, that hasn’t been changed in certain specific ways that reduce benefits or increase costs to consumers.)
The individual mandate was still in effect for 2018 but was reduced to $0 after the end of 2018.
Under Obamacare, preexisting conditions are covered, including pregnancy. Maternity care and childbirth are considered essential health benefits, which means all Marketplace health plans must cover them—even if you were pregnant before your coverage begins.
Some older individual health plans, though, don’t have to cover pregnancy and childbirth. (An individual health plan is a plan you buy yourself, not the kind you get through your job.)
If you work part-time and can’t get coverage from your employer, you can purchase a plan through the Marketplace. Depending on your income level, you might be eligible for a lower policy premium.
However, if you can get health coverage from your employer, you can still buy insurance through the Marketplace. But you might not qualify for a premium tax credit and other savings based on your income.
If you lose your job-based coverage, you have the option of continuing your plan through COBRA for 18 months or of purchasing an individual plan through the Marketplace. You don't need to wait until an open enrollment period to sign up for a Marketplace plan if you lost your group insurance.
If you're self-employed, meaning you run your own business or do freelance or contract work, and you don’t have employees, you can purchase an individual Marketplace plan.
If you have employees (not independent contractors), you're considered an employer and a small business. You might be able to use the SHOP Marketplace for small businesses to offer coverage to yourself and your employees.
To get more information about Obamacare, learn about available plans, and get information about how to enroll, go to www.Healthcare.gov.
]]>I used to go to a doctor in another state. Then I moved and went to another doctor. I signed a release for the new doctor to obtain records from the first one.
Later on, I had to go to yet another doctor, who asked me for all pertinent past records. To get the ball in motion, I sent a certified letter to the second doctor and asked for the records she had obtained from the out-of-state doctor.
She sent a certified letter back saying that she was prohibited by law from giving me these records and that I had to go directly to the out-of-state doctor to obtain them. I do not want her to keep these records, and I need them for my new physician.
Is it true that the law forbids her from turning my own medical records over to me or a new doctor of my choice?
Under the federal Health Insurance Portability and Accountability Act (HIPAA), you have the right to access your medical records, get copies of them, and amend (correct) them. Sometimes state laws dictate the exact process to request records and how much you'll have to pay to get them. (To get basic information about HIPAA, see What is the Health Insurance Portability and Accountability Act (HIPAA)?)
So, legally, you have a right to a copy of your medical records. But it is also true that you will have to go back to the original doctor that you saw for many types of medical records. Your new doctor should have no problem getting records from both of the old doctors with nothing more than your signed consent form. But generally all evaluations and test results must come from the original source, and you, the former patient, must ask for them directly. Another person can procure those records for you only if you have given him or her a medical power of attorney.
Medicare was created to deal with the high medical costs that older citizens face relative to the rest of the population—especially troublesome given their reduced earning power. But eligibility for Medicare isn't tied to individual need. Instead, it's an "entitlement program"; you're entitled to it because you or your spouse paid for it through FICA taxes.
Although you may qualify for and receive coverage from both Medicare and Medicaid, you must meet separate eligibility requirements for each program. Being eligible for one program doesn't mean you're eligible for the other. If you qualify for both, Medicaid will often pay for Medicare Part A and B premiums, deductibles, and copayments.
The information below provides the basics of each program.
For more information on what Medicare doesn't cover, see Nolo's article Medigap: Covering the Gaps in Medicare.
To learn more about health care options in your retirement years, you may find it helpful to read Social Security, Medicare, and Government Pensions, by Joseph Matthews and Dorothy Matthews Berman (Nolo).
]]>The CFC program requires states to allow Medicaid beneficiaries to direct their own care as much as possible. Under CFC, the Medicaid beneficiary should have the authority to interview care attendants, choose the best one, and fire that person if necessary.
Here are the various eligibility rules for Community First Choice.
Your state. You cannot receive Community First Choice services unless you live in a state that has chosen to offer CFC. As of late 2013, only eight states had decided to offer the CFC option in their Medicaid plans: Arkansas, Arizona, Oregon, California, New York, Montana, Minnesota, and Maryland. These states are in different stages of implementing the program.
Income limits. If you live in one of these states and want to receive CFC services, you have to meet Medicaid eligibility requirements in your state. However, low-income individuals whose income is too high to qualify for Medicaid may still qualify for CFC services. The CFC program serves individuals whose income does not exceed 150% of the federal poverty level (FPL). (In contrast, starting in January 2014, the uniform income level for Medicaid eligibility is 133% FPL. For the figures these percentages represent, see Nolo's article on the various limits that are tied to the FPL.)
Note that some states already have income limits that are higher than 150% FPL for certain groups of people who require institutional care. In those states, the higher income limits also apply for CFC services.
Need for care. You must need an "institutional" level of care before you can qualify for CFC services. You meet an institutional level of care if, without the home- and community-based services, you would need to be in an institution like a nursing home. If your state offers a CFC program, it will evaluate your level of care needs when you apply for services.
No other limits allowed. Unlike other Medicaid home- and community-based options available to states (for example, the Home and Community-Based Services (HCBS) waiver), CFC specifically prohibits states from limiting the program by only offering it to certain types of people or to certain communities. If CFC is available in your state, then it is available to you regardless of your age, disability, or where you live in the state. Also, the program does not permit the state to cap enrollment, so the program is available to as many qualified people as apply for it.
Under the CFC program, states are required to provide home- and community-based services to Medicaid beneficiaries to enable them to avoid institutionalization, but they have some flexibility about how to provide these services.
States can use what Medicaid calls an “agency-provider model,” in which Medicaid beneficiaries rely on an agency to help them locate, select, and manage the services they need to stay in their homes. Alternatively, states can use what Medicaid calls a “self-directed model,” in which Medicaid beneficiaries are responsible for locating, selecting, and managing their own services. States can also use another model for delivering CFC services, as long as they get approval from the Centers for Medicare and Medicaid Services (CMS) first.
States also have some choice in the types of services they offer in their CFC programs. Some services are mandatory, and some are optional.
In a CFC program, you can get services that help you with activities of daily living (ADLs) and with instrumental activities of daily living (IADLs). ADLs are activities that you need to do to be able to live, like moving from place to place, using the toilet, washing, feeding yourself, and eating. IADLs are activities that you need to do to be able to live independently, even though they are not quite as fundamental as ADLs. Some examples of IADLs are housecleaning, shopping, and managing your money. CFC programs must offer help with both ADLs and IADLs according to your specific needs.
In addition, CFC programs must offer help with health-related tasks like organizing medication and helping you take it or helping you maintain medical devices that you need.
CFC programs are required to pay for back-up systems to ensure that you always have the care that you need. Examples of back-up systems are beepers or medical alert buttons.
CFC programs are also required to offer you training on how to hire, manage, and fire your attendants. One of the goals of the CFC program is to put Medicaid beneficiaries in control of their own care as much as possible, and allowing beneficiaries the chance to choose their own care attendants is an important part of the program.
States can also offer other services in their CFC programs. Optional services include payment of costs needed to transition out of an institution (like first month’s rent, security deposits, moving expenses, or funds for bedding or kitchen supplies) and payment for services or items needed to increase independence and decrease the need for a care attendant (like a bus pass or a microwave).
If you live in a CFC state, contact your local Medicaid office to ask about the application process. You can find your local Medicaid office here. If you don't live in a CFC state, you can still contact your local Medicaid office to find out whether there are any other home- and community-based programs for which you might be eligible.
]]>These accounts differ in their eligibility requirements, contribution guidelines, and the advantages they offer to account holders. Learning the basics about each type of account will help you decide which one is right for you.
A health care FSA, as opposed to a dependent care FSA, is an employee benefit that allows you to set aside money on a pre-tax basis to pay for medical expenses not paid by insurance.
Generally, any employee whose employer offers an FSA as a benefit can participate. However, certain limitations may apply if you are a highly compensated or key employee.
If you are enrolled in an HSA, you might also be able to enroll in a "limited" FSA if your employer offers one. This account is similar to a regular FSA but limits qualified medical expenses to dental and vision so that it complies with HSA requirements.
Contributions are made with dollars deducted from your paycheck before your employer calculates your taxes. The more out-of-pocket medical expenses you have over the course of a year, the higher your annual election (the amount you want to set aside in your FSA) should be, and the greater your tax savings would be.
Withdrawals for qualified medical expenses are typically tax-free.
Your employer will deposit your annual election into your FSA in equal installments throughout the year, depending on your paycheck schedule. The employer also may contribute to your account.
The IRS places no limit on the amount of money you or your employer can contribute to the account. However, the plan itself is required to set either a maximum dollar amount or maximum percentage of compensation that can be contributed.
You can tap your FSA to pay qualified medical expenses up to your annual election amount, even if you have not yet placed the funds in the account.
To access account funds, pay for qualified medical expenses (which range from copayments and deductibles to orthodontics and eyeglasses) out of your own pocket and then submit a request for reimbursement. Or, you can use a debit card, credit card, or stored value card linked to the FSA if your employer provides one.
You cannot receive distributions from your FSA for health insurance premiums, long-term care coverage or expenses, or expenses that are covered under another health plan.
Carefully estimate your annual medical expenses. Make sure your estimate is as accurate as possible, because you forfeit any money in your FSA that you don't use by the end of the year. (The IRS now allows plans to provide an additional two and one-half months after the end of the plan year during which employees can use their funds. Not all plans provide this option.)
An HRA is an employer-funded account from which employees are reimbursed for qualified medical expenses not covered by the employer's health plan.
Any employee whose employer offers an HRA as a benefit can participate, though contribution limitations may apply for highly compensated employees. You can take advantage of both an HRA and an FSA, if they are offered.
Contributions by your employer aren't added to your gross income. Employees aren't taxed on their HRA reimbursements.
Only your employer can contribute funds to your HRA, and the schedule and amount of the contributions are determined by your employer.
To use your available HRA funds, pay for eligible expenses and submit a request for reimbursement. Or, if your employer provides a debit card, credit card or stored value card linked to your HRA, you can use that to make payment.
Eligible expenses may include all medical expenses allowed by the IRS, or they may be limited by your employer. Unlike an FSA, an HRA does allow distributions for health insurance premiums and long-term care coverage.
Depending on your employer's policy, unused funds in your account may carry over to the next year.
Employers can customize an HRA program to meet their needs. Because of this, program guidelines vary from company to company. See your employer's plan documents for rules about your HRA benefit.
An HSA is a tax-exempt account that allows account holders to use employer contributions and earnings to pay future medical expenses.
An eligible individual may establish an HSA at any number of banks, credit unions, insurance companies, or other entities that meet IRS requirements. Or, the account may be established as part of an employee benefits program.
To be eligible for an HSA, you:
You might or might not be eligible for an HSA if your employer offers a flexible spending account or a health reimbursement arrangement; it depends on the particular account the company offers.
There are three ways to reduce your federal taxes with an HSA.
State tax treatment of HSAs varies according to your state's law.
Contributions to an HSA can come from you, your employer (if the company offers such a benefit), or both. For 2023, you can contribute up to $3,850. If you have family coverage, you can contribute up to $7,750. A catch-up provision of $1,000 also applies for participants who are over 55.
You can withdraw funds from your HSA, tax-free, to pay for any qualified medical expense not paid by your health plan. Qualified medical expenses are defined in IRS Publication 502, Medical and Dental Expenses. If you use your HSA funds for anything other than qualified medical expenses, you will pay taxes on the withdrawal. If you are not disabled or older than 65, you also will be subject to a 20% penalty.
Unlike a flexible spending arrangement (discussed below), an HSA allows unused funds to roll over from year to year. There is no limit on how much you can accumulate in your HSA for future use.
You own your HSA. That means the account goes with you when you leave the company, even if it was established and funded as an employer-sponsored benefit.
Like an HSA, an MSA is a tax-exempt account that allows account holders covered by a high-deductible health plan to save for future medical expenses. But the introduction of the more flexible HSA (described above) has made the MSA obsolete.
The MSA, also known as the "Archer MSA," was created specifically for self-employed individuals and small business employees.
An MSA offers the same tax benefits as an HSA (see "HSA Tax Treatment," above).
You can no longer open a new MSA and you can't contribute additional money into an existing MSA. You can, however, continue to maintain an existing MSA and take tax-free distributions to pay for qualified medical expenses. If the account still has a balance when you retire, it will be converted to an individual retirement account (IRA).
Unless you are disabled, MSA distributions for anything other than qualified medical expenses prior to age 65 are subject to income taxes and a 15% penalty. Distributions made after age 65 for non-qualified expenses are subject to income taxes, but there is no penalty.
The account balance can roll over from year to year.
There is much more to know about each of these accounts. To learn more about the particular type of account that is available to you or that you are considering establishing, check with your employer or see IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans.
If you are an independent contractor, freelancer or consultant and want to know more about HSAs, see Working for Yourself, by Stephen Fishman (Nolo).