Medicaid is a complex system. It was designed by an army of bureaucrats in the 1960s and has received scant upgrades since then. However, it is there to help you. It might be hard to navigate and confusing at times, but it is important to know its purpose, its functions, and its nuances.
What is Medicaid?
Medicaid is a program that combines state resources and logistics with federal funding. In short, the government of each state organizes medical care for all the Medicaid recipients that live in that state. Then, the federal government organizes how to pay the people providing those medical resources.
Understanding how this is organized requires understanding the difference between state and federal authority. The federal government cannot order a private medical establishment to provide healthcare to anyone. But a state government can. The issue is that state governments do not have the money for that.
The federal government does have the money for that though. Moreover, they have a vested interest in the wellbeing of their citizens (states do too, but they have less resources to provide for them with). Medicaid helps low-income citizens and families get the healthcare they need to go on living without crippling medical debt.
Medicaid exists to help people pay for medical expenses. Always remember this, as it is unlike any other option for paying medical bills. Even the Affordable Care Act (more commonly known as “Obamacare”) makes use of privately owned insurance companies. Those insurance companies are motivated by profit, not by making sure you get medical treatment. That is where Medicaid is different from other payment options.
What is retroactive Medicaid?
Insurance in the United States is so convoluted and expensive that most people do not seek it out at all. This is made worse by the fact that nobody teaches anyone in school that government programs like Medicaid even exist. As a result, many people only apply to Medicaid after they have sought medical treatment.
Luckily, Medicaid is designed around this. Medicaid has a function called “Retroactive Medicaid”, which applies automatically after you sign up for Medicaid. This enables you to use Medicaid to pay for medical treatment as long as you got the medical treatment as recently as three months before applying to Medicaid.
An important note is that Medicaid will pay for any medical treatment you got three months before submitting an application. That means that if you get medical treatment, then submit an application but are not approved for four months, Retroactive Medicaid will still allow you to use Medicaid to pay those medical bills.
This is another reason why Medicaid is different than other methods of paying medical expenses. When you are paying medical expenses through normal insurance (even insurance you get through a job) the insurance will only cover things that happen after you get the insurance. In a way, this is intuitive.
But Medicaid is designed to benefit the people who need it, and the people who need it will rarely be the kinds of people that seek it out until they already have a problem. There is a huge gap in the United States between the services people know exist and the services they need to apply to.
If you find yourself unable to pay medical bills it is worth applying to Medicaid even if you are not sure what Medicaid can pay. It is so easy to make assumptions about what you can and cannot have, especially if you are lower income. But even if Retroactive Medicaid is restrictive, it is still more expansive than you might think.
Imagine you get sick, go to the doctor, and you get prescribed a treatment for your illness. These three steps all take place over the course of three months. Then, three months later, you are still getting medication for the illness you suffered three months before. Can Retroactive Medicaid help?
Yes, it can. Because even if the initial sickness, doctor’s visit, and medication is outside the purview of Retroactive Medicaid, your more recent follow-up medications are not. This is a nuance that a lot of people miss that costs them money: Medical expenses do not just appear all at once, but usually come over time.
What is the point of Retroactive Medicaid?
Retroactive Medicaid provides a safety net for people that do not have the finances to pay for medical care. Injury and illness can occur unexpectedly—nobody plans to break their arm or develop cancerous tumors, after all. And in order to protect people who never knew Medicare existed, Retroactive Medicare exists.
One thing that people should know about Retroactive Medicaid is that in some states the Retroactive Medicaid will only cover unpaid medical expenses. Other states will reimburse people for the medical bills they already paid. This is uncommon, and does not cover all medical bills though.
Retroactive Medicaid is especially critical to anyone with a long term condition, where costs are added up overtime more than they are dumped on them at once.
Eligibility for Retroactive Medicaid
In order to claim Retroactive Medicaid you must have a monthly income less than $2,382. You must also have no asset or amount of assets in your name more valuable than $2,000. This means that if you make all your monthly earnings through high priced stocks, then even though you do not own your own money, you still do not qualify due to owning the assets that provides your money.
This chart from the Medicaid Planning Assistance website shows what kind of assistance you can get with different levels of income under the Pennsylvania application of Medicaid rules and regulations.
It is worth noting that what Medicaid defines as “income” is any money that is coming into the possession of the applicant. That means that even if your monthly salary at work is less than $2,382, if you receive extra money through gifts, alimony, court settlements, lottery winnings, or any other means, Medicaid counts that.
The only exception Medicaid makes is for the Covid-19 relief stimulus checks. Something that is hinted at in the chart, but not stated is that when only one person in a married couple applies for Medicaid, then only that person’s income is counted. But there is one other factor that one must consider in their “income”.
The state of Pennsylvania has what is called the Community Minimum Monthly Maintenance Needs Allowance (CMMMNA). This is a rule in place that subtracts the amount of money you spend on living expenses from what Medicaid counts as your “income”. This amount can reach up to $2,177.50 per month.
This is what confuses a lot of people. What it means is that if you take in $2,382 per month, but can prove that you pay a $1 utility bill every month, then the CMMMNA rule will allow you to state your income as $2,381 (which is just under the Medicaid income threshold). This makes a big difference for a lot of people.
The last definition you will want to remember is the definition of an “asset”. In the context of Medicaid an asset is a stock, bond, investment, savings account, and/or checking account. The total value of all of your assets must be less than $2,000 in order to qualify for Medicaid.
Worth noting is that the asset limit and the income limit are independent from each other. What this means is that even if you are brushing up against the income limit for Medicaid approval, you can still have $1,999 in assets and get approved. Income and assets do not add together, even if assets provide your income.
How to apply
Medicaid in Pennsylvania works much the same as it does anywhere else in the United States. You apply either through the mail or online. After you submit an application, even if you applied online, you will then be mailed details of what plans are available that you will have to respond to through the mail.
This response will need to include proof of your citizenship, your income, and your assets. All of this can be handled by scanning the relevant documents in with a scanner at a computer. Just to reiterate: You send copies of the documents, not the documents themselves.
That means that while the Medicaid offices need proof of your social security, they do not need the social security card itself. All you need to do is scan the social security card and include it in your response. If any documents are missing, do not worry. Medicaid offices will let you fax them copies of your documents as well.
If you do not own a computer, scanner, or fax machine it might seem scary or confusing to try and mail copies of your important documents. But all of these machines can be found at a public library.
The first step to applying to Medicare in Pennsylvania is filling out this application. You must then mail that application in or drop it off at your local county office. The closest county office to you can be found here or by calling 866-550-4355.