The Other "M": Medicaid

Medicaid is a health insurance program run by states for people living at or below poverty. The state and the federal government both share the costs. Many older people who qualify for Medicaid are also eligible for the federal government's Supplemental Security Insurance program (SSI). If your mom or dad never held a job, received extremely low wages, or didn't work long enough to qualify for Social Security, he or she may be eligible for SSI. In fact, anyone receiving SSI is automatically enrolled into Medicaid.

Who's in Charge?

Your state department of welfare or human services usually administers the program through local board of assistance offices. Since each state has its own set of rules and policies, check with your local welfare office (in the blue pages of your phone book) to see if your parent is eligible. Under Medicaid, your parents will have access to physicians who accept Medicaid and they will not have to pay a premium or deductibles. Hospitalizations, prescriptions, and doctor visits are covered. Be aware, however, that some doctors, because of the low reimbursement rate given by Medicaid, may refuse to see your parents.

Your parents' home, car, personal belongings, household furniture, and any life insurance policies with a cash value of $5,000 or less cannot be counted as assets by the welfare office when it determines your parents' eligibility into the program.

If Mom or Dad is a Medicaid beneficiary, she or he should always send medical bills to Medicare first. Whatever Medicare doesn't cover, the state Medicaid program will pick up.

Spending Down

You might hear the term “spending down” in reference to Medicaid. This is related to nursing home care. Your parents might have entered a nursing home as “private pay” using their savings, assets, and income to meet the monthly bill. At some point, Mom or Dad might spend all of his or her assets, and the lowered income subsequently qualifies your parent for Medicaid. For more information on Medicaid and nursing homes, see Who Pays for a Nursing Home?.

Help with Premiums

Even if your parents do not qualify for Medicaid they may qualify for two state programs that can help them pay their Medicare premiums. If your Mom or Dad can't afford paying the Medicare premiums for Parts A and B and the deductibles, they may be eligible for what's known as the Medicare buy-in program (the Qualified Medicare Beneficiary, or QMB, program). With this program, your parents have to be at or below poverty. If they are, the state will cover Medicare premiums, deductibles, and most of their co-payments. Poverty level means that their financial assets (not the house) can't be more than $6,000 for a couple and $4,000 for an individual.

If Mom and Dad are just above the poverty level (up to 10 percent above), the state will pay for their Medicare Part B premium. This program is known as the SLMB program (Specified Low-Income Medicare Beneficiary program).

Call your local area agency on aging to find out how to apply in your state. The www.medicare.gov Web site offers you the latest eligibility criteria for each program.