Medicaid Reimbursement Rules

• In order to receive federal government funds, each state must first implement a Medicaid "asset recovery" plan. The recovery plan allows each state to help reduce the administrative costs to the federal government in order to offset the total costs of Medicaid assistance. The Omnibus Reconciliation Act of 1993, also known as OBRA, requires states to recoup funds directly from Medicaid recipients after the recipient receives the government medical assistance. Usually, efforts to recoup the funds begin after hospital stays or long-term institutional treatment from the recipient's estate when the recipient passes away.
  
  

Special Groups

• Supplemental Security Income recipients may automatically qualify for Medicaid without having to separately apply for the program. Other applicants must first show they need financial health care assistance by proving limited income and resources. Some groups of medically needy individuals such as pregnant women and low-income children do not have to undergo the entire waiting period for eligibility determination.
  
  

Limited Incomes

• Generally, each states require applicants to prove their monthly income earnings are less than the federal poverty guideline limits and state limits. Many states require applicants to earn less than 120 percent of the federal poverty guideline. For 2010, a family of four could not earn more than $26,460 annually to meet the 120 percent guideline limit. Additionally, applicants must prove limited resources or limited available assets.
  
  

Limited Resources

• To qualify for Medicaid benefits, applicants must provide proof of limited assets without intentionally depleting their property or transferring property to avoid the government's financial recovery efforts. For 2010, individual applicants could own up to $2,000 in available resources, and married spouses could own up to $3,000 in assets. However, to avoid impoverishment, the government uses special spousal impoverishment exception rules, and provides exceptions for personal vehicles and medical supplies. The spousal impoverishment exception allows applicants to exclude the value of their homes as countable assets and to allow spouses of Medicaid recipients to remain in their homes for the remainder of their lives. Since Medicaid liens require recipients to provide the government with real property liens to satisfy their repayment obligations, the exception disallows the government from selling their homes while they are still alive. Additionally, Medicaid rules allow applicants to exclude their personal vehicles and necessary medical supplies from countable resources.