There are many important entitlement benefits and public assistance programs that may benefit an individual with disabilities, or a family where a loved one has a disability.
Of all of those benefits and programs, arguably the most important – and the one that so many other elements of a person’s life plan depend on – is Medicaid eligibility.
I know from experience….
My adult autistic son has been on Medicaid for over 9 years and counting.
Without access to Medicaid, he would NOT have the ability to live in subsidized housing, collect EBT (aka “food stamps” as they used to be called), have his medical bills covered, and a host of other benefits.
Since my private insurance doesn’t cover it either, we would have had to help him, which would easily cost us tens of thousands of dollars a year (or more!) out of our own pocket!
What Is Medicaid?
Medicaid is a coordinated federal and state program designed to pay the long-term or permanent medical expenses of elderly, low income, and disabled individuals.
Medicaid is ideal for disabled people who need lifelong care and require long-term support to function in the world.
This is the reason my son qualified for Medicaid.
While my son is doing significantly better than a few years ago, he still struggles with basic life skills and would have an extremely difficult time living on his own in the outside world.
The Centers for Medicare and Medicaid Services (CMS) is the federal agency within the US Department of Health and Human Services that works in partnership with the state governments to administer Medicaid services and benefits.
See this link for their contact information and to learn more.
- In addition to medical care, Medicaid funds are used to pay for or support:
- Housing
- Therapies
- Home and Community-Based Services (HCBS)
- Respite Care
- Community habilitation (com hab) workers
- Supported employment
- Self-directed service budgets
And many more essential services for disabled people.
The value of these Medicaid services can be millions of dollars over the lifetime of an individual with a disability! (Yes…. Millions!!!)
That is why protecting an individual’s Medicaid eligibility is SUCH an important goal of special needs financial planning.
The reality is (and I learned this firsthand) that if the government does pay for it and your private insurance doesn’t pay for it… than YOU have to help them out of your own pocket!
And who has a few million just lying around not being used for something else (unless you are Jeff Bezos or Elon Musk! Lol 😊)
Here is another important thing to learn: Medicare and Medicaid are TOTALLY different!
Medicaid Is NOT Medicare
Even though the names sound so similar and very often get confused for each other, Medicaid and Medicare are very different programs that work differently, provide very different benefits, and have very different rules for eligibility.
Medicare is a federal health insurance program in the United States for people age 65 or older and younger people with disabilities.
There are multiple parts of Medicare (A, B, C, D), with each providing a different level or type of health insurance coverage.
Medicare Part A (hospital insurance) is generally paid for by payroll deductions during your working years, so most people do not have to pay for this coverage in retirement.
Plus, there are no income- or asset-based restrictions around Medicare eligibility like there are for Medicaid.
Most importantly, what Medicare covers is very different from what Medicaid covers.
Medicare is just medical insurance meant to cover temporary conditions where you are expected to fully recover from.
While it can include all kinds of therapies and hospitalizations, it is designed for temporary rehabilitative care where a patient is expected to get better and return home.
Medicare is NOT for long-term care where a patient is expected to need support for the rest of their life.
For example, if a person with Medicare falls and breaks their hip, Medicare will pay for them to go to a hospital, get surgery to repair the hip, and go to a rehab facility for a certain (limited) number of days while they receive physical therapy and other treatments.
Eventually that person is expected to get better and to be able to return home and to life in the community.
However if that person’s injury was so significant or their condition chronic to the point that they were not able to return home without special support and assistance (e.g., stay at an assisted living facility or a nursing home to support their basic life needs), how would it get paid for?
Medicare will not pay for any of that extended assistance… but Medicaid does! 😊
It is the same thing for people with disabilities who need lifelong care & support and who are not expected to get better during a stay at a hospital or rehab facility.
Fortunately, Medicaid can pay for these types of long-term care if the person is eligible, but Medicare does not.
How Does Medicaid Eligibility Work?
Medicaid is automatically available to individuals who are eligible for Supplemental Security Income (SSI), but it is also available even for those who are not eligible for or receiving SSI.
Medicaid is both Needs-Based and Means-Tested.
Needs-based means that in order for a person to be considered disabled for Medicaid purposes, the disability needs to be permanent and needs to affect that person’s ability to function in society and to engage in substantial gainful activity.
Means-tested means that the Centers for Medicare and Medicaid Services (CMS) will look at the income of the person applying for Medicaid, and they will also look at their resources (assets).
For most Medicaid programs, the income limits are based on a percentage of the Federal Poverty Level (FPL).
For example, in 2025, a single individual’s income must be at or below 138% of the FPL to be eligible for some Medicaid programs.
The “medically needy” category allows individuals with higher incomes to qualify if they can “spend down” their income and assets to the required Medicaid level.
This means they may need to pay for some of their medical expenses to reduce their income to the eligibility threshold.
For a single individual in 2025, the monthly income limit for Medicaid eligibility is $2,358. The monthly income limit for the “medically needy” category for a single applicant is $1,800.
For means testing, the assets of a person applying for Medicaid benefits must be less than $2,000 (Single) or $3,000 (Married).
Some states have their own, separate Asset Limits.
For New York State, the 2025 Asset Limit is $32,396.
For the state of Michigan, the 2025 asset limit is $9,660 for individuals and $14,470 for couples.
Medicaid Eligibility: Why and How to Protect Your Assets
The asset limits in particular are very important to understand and be aware of since they can vary state to state.
Unplanned inheritances are the worst culprit for being disqualified from Medicaid.
This is because any money that suddenly becomes owned by a person with a disability can often be enough to disqualify them from their Medicaid services.
So make sure you do the proper legal planning and proper beneficiary designation set up on all of your accounts.
Proper set up will protect future eligibility by avoiding ever leaving any assets directly in the name of a person with a disability who is receiving Medicaid, or who may benefit from Medicaid at some point in the future.
In addition, be wary of any bank accounts, savings bonds, retirement accounts, primary residence real estate, and even cash-value life insurance owned in the name of a person with a disability.
These assets can all grow in value over time and quickly exceed the Medicaid asset limit and impact their eligibility.
As difficult and time-consuming as it is to apply for Medicaid and to receive coordinated services, it is even harder and more challenging to lose those benefits and services THEN have to reapply!
So be very careful with all types of assets when planning for your loved ones with disabilities!
Important Tools To Protect Medicaid Eligibility
Special Needs Trusts (SNTs) and Achieving A Better Life Experience (ABLE) accounts are two very important tools for Special Needs Financial Planning.
These tools allow an individual with a disability to have access to resources and funds that do NOT count against their means-tested asset or income limits for entitlement benefit programs (e.g. like Medicaid! 😊).
Both SNTs and ABLE Accounts are forms of asset-protection accounts.
Each allows for the accumulation of money, for the benefit of an individual with a disability, without jeopardizing eligibility for means-tested entitlement programs.
Also, when distributions are made from an SNT or ABLE Account there is no impact on Medicaid eligibility so long as the distributions are carefully limited to pay for certain classes of items called “Qualified Disability Expenses.”
Stay tuned for a deeper dive on SNTs and ABLE Accounts in future blog posts and articles!
What Are Medicaid Waiver Programs And How Do They Work?
In many cases, children and youths with disabilities may benefit from the many services that Medicaid can provide for them.
However, those children may not qualify for Medicaid based on their family’s income and resources.
In these cases, the child can ask for the parental income and resources to not be counted (“a waiver of parental deeming”) in order to access Medicaid’s Home and Community-Based Services (aka HCBS) [i.e., 1915(c) and 1915(i) HCBS Waivers].
Medicaid waiver programs allow minors who are under 18 years old to qualify for Medicaid’s Home and Community Based Services (HCBS) despite the assets or income of their parents or guardians exceeding the above limits.
These programs also allow states to provide services that might not typically be covered under standard or “straight” Medicaid.
Children’s HCBS is for children and youth who need extra time in at-home care and who want to avoid going to a long-term (residential) setting.
The aim is to enhance the quality of life for individuals with disabilities by providing personalized support that caters to their unique circumstances.
Children’s HCBS are typically provided where children and families are most comfortable – at home or in the community.
These programs support children and youth as they work toward goals and achievements, help children be successful at home and in school settings, as well as offer personal, flexible services to meet each child’s unique health and wellness needs.
These waivers also help in transitioning individuals from institutional care to community-based settings thereby promoting independence and integration into society.
Types of Medicaid-Funded Support Services
Supports and services commonly accessed by families and youth and can include:
- Family Support Services (FSS)
- Community habilitation (delivered outside of school hours/settings)
- Respite care
- Employment training and support
- Rehabilitation Services
- Assistive technology and vehicle/environmental modification
- Clinical services, behavioral services, and more.
Family Supports Services help families care for their loved ones residing at home and can include:
- Family member training and support groups
- Reimbursement for specific disability-related expenses
- Information about and referral to specialists
- Sibling services
- Access to recreational, social activities and after school programs.
Community Habilitation helps the person with disabilities learn and develop needed to:
- Live safely and more independently
- Maintain or improve their health
- Work toward other personal goals
- Meet people and make and keep friends
- Belong in their community and take part in community activities
- Learn about and experience community-based activities.
Respite care includes many forms of relief for caregivers such as in-home respite, site-based respite, recreational respite, camp-based respite, and more.
For Employment training and support, Medicaid can fund services aimed at helping individuals with disabilities find and maintain employment in integrated community settings.
These services may include:
- Job search assistance (resume building, interview practice).
- Job development and placement.
- Job coaching and training.
- Benefits counseling and planning.
- Workplace support services.
Prevocational services are also included which focus on developing general non-job-specific skills that contribute to employability including learning and work experience, volunteering, and developing life skills related to employment.
According to the Association of People Supporting Employment First, Medicaid may also cover rehabilitation services that address conditions impacting functioning and can include employment-related services like peer support, social skills training, and counseling.
Assistive technology and vehicle/environmental modifications are any item, software, equipment, or product that is used to increase, maintain, or improve the functional capabilities of persons with disabilities.
- Assistive Technology (AT): Medicaid can cover medically necessary AT devices that are considered durable medical equipment. Examples include mobility aids (e.g. wheelchairs and walkers), prosthetic and orthotic devices, communication devices, and hearing / vision aids.
- Home Modifications: Most state Medicaid programs help pay for modifications to homes to promote independent living, such as wheelchair ramps, grab bars, doorway widening, widened doorways, stairlifts and much more.
- Vehicle Modifications: While traditional Medicaid may not directly cover vehicle purchases or repairs, it can fund modifications to vehicles already owned to improve accessibility and transportation for individuals with disabilities.
Modifications may include ramps and lifts, adapted driving controls, and specialized seating.
Clinical services and behavioral services:
- Clinical Services: Medicaid provides essential medical services that support overall health and can enable individuals to engage in work and community life.
Examples include preventive care, prescriptions, rehabilitation services, and many others.
- Behavioral Health Services covered by Medicaid is a wide range of services including mental health, substance use disorder treatment, counseling, psychiatric medications / treatment, and many others.
What Are Care Coordination Organizations And How Can They Help?
Care Coordination Organizations (CCOs) are organizations that provide person-centered care management, planning and service coordination, and are staffed by care managers with training and experience in the field of developmental disabilities.
Specialists at the CCOs can help the person/family gather information, apply for Medicaid, and help the person/family identify both the services that meet their needs and the agencies that can provide the services needed.
CCOs also ensure services are available to meet their needs and help with any changes needed to their services.
Health Home Care Managers within the CCOs then work together as a team with children/youth and their families and service providers to make sure they receive the care and services they need to stay healthy.
All children eligible for HCBS can get care management services through the Health Home Care Management program.
What Are Self-Directed Medicaid Services?
The 1915(j) self-directed personal assistance services program – also known as “Self-Direction” or “Self-Directing Services” – is a HCBS Medicaid Waiver Service.
Self-directed services programs empower individuals with disabilities by allowing them more control over their services and align their care with flexible personal preferences and needs.
The aim or goal is to improve the individual’s quality of life and foster independence and autonomy
Self-direction gives the disabled person and their family the option to use a special Medicaid-funded budget to pay for the specific home and community-based services and supports they need.
Benefits of self-directing services include:
- Increased independence and autonomy
- Improved satisfaction with services
- Greater access to a wider range of support options
- Potential for more efficient use of resources
- Freedom of choice in how, when, and from whom they receive support
- More personalized and effective care
In self-direction, the person with disabilities (or their guardian) chooses the mix of supports services that work best for them, how and when they are provided, and the staff and/or organizations that provide them.
By doing so, the self-directing participant (or their guardian) accepts responsibility for co-management of their supports and services, which at times can be a time-consuming and challenging process.
The self-direction budget will depend on each individual’s unique situation and needs, and what kinds of services and supports are recommended for them in their Person-Centered Plan.
Many budgets are close to or over $100,000/year, so you can quickly see what the total value of these programs can be over a person’s total lifetime.
Examples of self-directed services include:
- Self-hiring staff and being able to pay higher wages than regular Com Hab workers (which often leads to better quality staff and higher staff retention)
- Coverage of community-based classes, so you do not have to pay out of pocket (e.g. health club/gym, martial arts, cooking, music, art, swimming, and more)
- NOTE: self-direction does NOT pay for therapies like OT or speech. Those are covered by medical insurance/Medicaid.
- Assistive technology and environmental modifications
- Housing subsidies that enable more choices over where to live
- Transportation reimbursement
- Paying for summer camp
- Respite Care
Self-Directed Medicaid Services Process
In many cases, families work with an agency that provides support and assistance with managing the self-directed services for an individual with a disability.
Other times, self-directing participants and their families meet with a team of people whom they choose called a Circle of Support who help select the services and put together a budget.
Next, they work with special fiscal intermediaries and self-direction support brokers to help navigate the self-direction process, manage budgets, process payments, and ensure that services are compliant with regulations.
Anyone who is eligible for Medicaid services and enrolled in the HCBS Waiver can choose to self-direct their services.
Going through the process of applying and being approved for self-direction is an involved process, and it can take a long time.
However, many families feel that the benefits they gain in the end are all very much worth the effort they put in.
Ready To Take A Breather? 😊
As we tell everyone in our videos, being the parent of a special needs child forces you to wear many hats.
Being parents of special needs children ourselves, we need to juggle the care of our family, keep up with paying medical bills, save for their college education, and find some creative ways to save for retirement all from the same pool of money.
Unless you can also leverage Medicaid to help you out on your journey!
Being able to leverage Medicaid can literally save you millions of dollars (yes, Millions of dollars 😊) over the life of your special needs child.
If you hung in there with us to the end of the article then give yourself a round of applause! 😊
Medicaid is a tough and complicated subject and we wanted to give you a solid foundation to research, ask questions, and learn more about.
However, If you feel like you need some help getting started on learning more about Medicaid and the services it can provide then:
Schedule a call with my friend Zeke Zimmerman here!
Until next time,
Live The Life You Love, Want, And Deserve! 😊