How Medicaid Financial Eligibility Rules Exclude Financially and Medically Vulnerable Older Adults

Abstract

Millions of older Americans rely on Medicaid because it is the largest payer of long-term services and supports. To qualify for the program, low-income individuals age 65 and over must meet income standards based on the dated Federal Poverty Level as well as asset tests that are often viewed as quite stringent. There has long been concern that current eligibility standards exclude many adults with significant health and financial vulnerabilities. We use updated household socio-demographic and financial information to simulate the impacts of five alternative financial eligibility standards on the number and profile of older adults that would gain Medicaid coverage. The study clearly demonstrates that a large number of financially- and health-vulnerable older adults are excluded from the Medicaid program under current policy. The study highlights the implications for policymakers of updating Medicaid financial eligibility standards to assure that Medicaid benefits are targeted to vulnerable older adults who need them.