HHS Proposals Could Expand Medicaid to Cover More Elderly, Disabled

New HHS proposals could expand Medicaid coverage to "tens of thousands of Americans," particularly the elderly, the disabled and families with disabled children living at home instead of in nursing care facilities. The proposed changes, anticipated to cost the federal government and state governments $960 million each over five years, are designed to aid individuals who earn slightly more than Medicaid income limits, but who "are strapped with overwhelming medical bills." Traditionally, Medicaid coverage is offered to those who are deemed "medically needy" after the cost of medical services is deducted from their income. However, in more than 40% of the states, the medically needy standard is "significantly below" the poverty level, a HCFA release notes. But under the proposed rules, states could "disregard portions of a person's income," such as money spent on food, clothing or housing. In addition, under current rules, individuals living in nursing institutions can qualify for Medicaid with much higher income levels than if they lived in the community -- a stipulation that some say constitutes an "institutional bias" discouraging the disabled from living on their own in the community. The new proposals would grant states greater flexibility to alter their own rules so that the elderly or people with disabilities would not lose their health care coverage if they moved into a community setting. The changes would also allow low-income people with disabilities to join the workforce by allowing states to overlook certain earnings or savings, such as money set aside to purchase a home or automobile or other items that "promote independence." States would also have the option of offering Medicaid coverage to young adults ages 19 and 20 who are either still in school or just beginning employment. The regulation will be published in the Federal Register next week (HCFA release, 10/27).