Benefits: Medicaid Deductible (FAQs)
Authored By: Legal Aid of North Carolina
What is a Medicaid deductible?
A Medicaid deductible is the amount of medical expenses that you must incur before Medicaid will start paying any of your medical bills.
- For example, if you have a deductible of $1500, your medical expenses must add up to $1500 before Medicaid will start paying your medical bills.
- You do not have to pay the bills in order for them to count toward your deductible amount.
- Once you reach the deductible amount, Medicaid will pay for additional medical bills you incur during the certification period. Medicaid will not go back and pay the bills that you used to reach your deductible amount.
How is a Medicaid deductible calculated?
The deductible is calculated by subtracting Medicaid's Medically Needy monthly income limit from your family's countable monthly income, then multiplying that amount by six.
- For example, suppose the monthly Medically Needy income limit for a household of one is $242, but your monthly income is $1000. The difference ($758) is then multiplied by six, resulting in a deductible of $4,548.
The deductible is calculated for a six-month period because that is the usual length of a Medicaid certification period. Once the certification period ends, you will have to meet your deductible again before Medicaid will start paying your medical bills again. Therefore, it may be to your advantage to hold your medical bills to meet your deductible at the beginning of a new six-month certification period.
What are the Medically Needy income limits?
The Medically Needy income limit depends on the number of people in your family who qualify according to Medicaid rules. The monthly income limits are:
- 1 person $242
- 2 people $317
- 3 people $367
- 4 people $400
- 5 people $433
- 6 people $467
- 7 people $500
- 8 people $525
- 9 people $542
The monthly income limit increases for each additional family member who qualifies under Medicaid rules.
How is a Medicaid deductible met?
A Medicaid deductible is met by adding up medical costs. You will be authorized for Medicaid on the date that your medical bills and other costs add up to the amount of the deductible. You will be authorized to receive Medicaid from that point through the end of the six month certification period.
Whose medical bills count toward the deductible?
- For a married couple, the medical bills of both spouses are counted toward the deductible.
For a child, the medical bills of the parent(s) are counted toward the deductible.
What medical costs count toward a Medicaid deductible?
Current Medical Expenses:
Current bills may be paid or unpaid, but only the portion of the bill that you are responsible for is counted. For example, if you have another type of insurance, the portion of the bill that is paid by that insurance is not counted.
Current medical expenses can include the following:
- Hospital charges
- Clinic and laboratory charges
- Prescription drugs
- Over-the-counter drugs (such as aspirin, Tylenol, cold medicines)
- Medical supplies (such as gauze, bandages, alcohol)
- Equipment (such as dentures, eyeglasses, walkers)
- Vitamins or supplements, if prescribed by your doctor
- Transportation to the doctor or hospital
- Premiums for private insurance
Unpaid Medical Bills:
Unpaid medical bills that were incurred before the current certification period may be counted toward your deductible, if your caseworker can verify the following:
- The unpaid bill is less than 2 years old (or, if over 2 years old, you have made a payment on the bill in the last 2 years);
- The bill is unpaid and the medical provider is still billing you; and
- If you had insurance at the time the bill was incurred, a claim was filed with your insurance company and was either paid or denied.
Once you have used an unpaid bill for your deductible once, you cannot use it again.