What is Medicaid?

Medicaid is a government benefit that can pay for the health care and long-term care of the needy. The surprising thing is that, because of the cost of long-term care, “the needy” often includes the middle class.

The legal definition of “the needy,” when it comes to Medicaid, includes elderly, blind, or disabled people who fall into one of two groups. The first group can’t afford health care because they have very low income to begin with and no assets. This group is called “categorically needy” in Medicaid lingo.

The second group can’t afford health care because they have a monthly health care bill much larger than their income. This group is called “medically needy” in Medicaid lingo. This second group includes many middle-class older people who, despite working and saving all their lives, simply can’t afford a $9,000 nursing home bill every month. As I often tell my clients, when there’s a bill that large coming in the mail each month, we’re all poor.

Note: BadgerCare Plus is a similar program that provides health care to low-income Wisconsin residents who are not elderly, blind, or disabled.

That’s a quick summary of a complex program. Once you start getting into the details—like who counts as disabled or what counts as income—it gets complicated.

Why is Medicaid so hard to understand?

What we generally call Medicaid is a system that involves federal, state, and county governments. In this system, the state enacts and administers a plan for “medical assistance.” The federal government provides money to pay for the medical assistance program—if the state meets certain requirements. The counties are the gatekeepers, the “boots on the ground”; the county department of human or social services usually takes the application for medical assistance and decides whether the applicant is eligible.

Note: The terms Medicaid, Medical Assistance, and MA are often used interchangeably. I generally use Medicaid because most people recognize it—it’s even the term Wisconsin DHS uses on its website. In the context of this blog, Medicaid usually means Wisconsin’s Medical Assistance programs, specifically.

So we have federal law, state law, county workers, and a large state administrative agency involved. In fact, the Wisconsin Department of Health Services has several sub-programs for Medicaid, muddying the waters further. These sub-programs, such as Family Care, Community Waivers, and Medicaid Deductible, are mostly about where you receive care—in a nursing home or in the community—and what benefits are available to you.

Medicaid is complex, but it can be explained.

Medicaid is a complicated program, which is why it often takes a legal education to have a chance at comprehending its rules and operation. But anybody can understand the basics of how Medicaid affects them, and why, if it’s explained well.

And yet, a good explanation is hard to find. Many workers in the system—social workers, nursing home financial managers, and the like—know “the rules.” But few have the time or patience to explain why the rules are what they are. That’s important, because the rules can feel unjust and confusing.

“The rules” is in scare quotes because, as lawyers know, it’s rarely so simple. With Medicaid, the rules are complex and they come with many exceptions. Every person or couple’s situation is unique.

I once had a client who talked to social workers for months before hiring me. She never understood why she was getting a bill for thousands of dollars each month while her husband was on Medicaid. It felt so unfair. Wasn’t her husband getting a benefit? Why was she still getting a big bill?

It wasn’t until I took half an hour to draw her a picture (literally) that it finally made sense to her. She needed a careful, compassionate explanation of how Medicaid determines how much money it will pay and how a married couple’s finances are involved in the calculation. Of course, the social workers tried to tell her “the rules” many times. But they never explained the rules in a way that made sense. They were treating her like a child who just needed to accept what she was told.