Medicaid and CHIP: Health Insurance for Low Income Adults and Children

Medicaid is a federal government program that provides health insurance coverage to over 50 million people nationwide. It is a means-tested, needs-based social welfare or social protection program.  While medicaid is a federal program, it is administered by each of the fifty states, and each state contributes funds to pay for the costs of medicaid.  To apply for medicaid, you must apply through the Department of Health and Human Services in your home state.

State medicaid eligibility workers measure several categories in order to determine eligibility, but the main focus is on the amount of income the applicant has received in a pre-determined time period immediately preceeding the application date, and the number of people in the family.

For Adults

To become eligible for medicaid coverage, the adult applicant needs to provide evidence that he or she meets the eligibility guidelines, including making less income than the federal poverty line, a lack of current or recent health insurance coverage, and no or little savings or cash on hand.  In most states, adults need to make less income than the federal poverty line to be eligible, as well as meet other requirements.

For example, according the HHS 2011 Poverty Guidelines, for a single adult with no spouse or children, he or she would have needed to average less than $10,890 in income to be eligible, as well as meeting the other requirements, such as a lack of recent health insurance, and other requirements by the individual state.


CHIP for Children and Pregnant Women

Unlike adults, children and pregnant women are generally eligible at up to 185% of the federal poverty line.  So, in many cases, parents are not eligible for medicaid because they make more than 100% of the federal poverty line, but the children in the family are eligible because the family's income is less than 185% of the federal poverty line.  The reason children and pregnant women have a higher income threshold is because children are covered by CHIP (Children's Health Insurance Program) that provides additional funds for children.

For the Elderly

In addition to medicare, low income elderly people may also eligible for medicaid, which can cover the cost of nursing home care.  Be aware that in some states, medicaid can claim against the estate after the death of the primary applicant.  IE, if the applicant has little to no income, but has value in a home, the state may claim interest in the estate after the death of the applicant.  To learn more, consult the Medicaid Estate Recovery Policy.

Laws on this topic may vary from state to state. This content is not meant to provide you with complete information and it is not intended to be legal or tax advice. It is recommended that you consult with your own attorney, accountant or other advisor regarding your specific situation.