What Medicaid Is and What It Means for Older Adults

For many Americans — including those on Medicare — the health insurance program for people with limited incomes is a lifeline

Tamara E. Holmes,

Updated July 29, 2025

AARP

Reviewed by

Tobey Oliver, MPP, J.D., and Brendan Flinn, MPH

Comments

En español

Published May 29, 2025

/ Updated July 29, 2025

Kiersten Essenpreis

Key takeaways

Medicaid acts as a health care safety net for all ages.
Eligibility is available in variety of ways, including via Medicare.
You may be in your state’s program. Some immigrants eligible.
Law’s enactment means 60-year-old program will shrink.
Changes could create problems in other areas.

Medicaid and the related Children’s Health Insurance Program (CHIP) may be known for their safety-net coverage of expectant mothers and young children, yet the joint federal-state program also provides health care for more than 17 million people age 50 and older on limited incomes, including some on Medicare.

For some of those older Americans, Medicaid coverage may be in jeopardy. The program marks its 60th anniversary July 30, the same date in 1965 that Medicare was signed into law.

States have the power to craft their Medicaid programs and some of the benefits they offer, but the federal government determines the general rules for the program. Some of those rules are changing because of legislation signed into law earlier this month called the One Big Beautiful Bill Act, and some older adults are among those most affected.

Through the years, Medicaid has been expanded in various ways, most notably in 1997 when federal matching money for states was provided to help children in families with limited incomes but above the level to qualify for Medicaid. That’s CHIP.

This year about 48 percent of Medicaid and CHIP beneficiaries are children. In 2023, about 39 percent of children 18 and younger nationwide received health coverage through Medicaid or CHIP.

In 2014, the Affordable Care Act (ACA) offered states federal matching money if they expanded Medicaid to people younger than 65 who earn slightly more than the federal poverty level.

A person can become eligible in several ways

Medicaid has several pathways to eligibility. Income is one: Your modified adjusted gross income is used to determine if your household earnings are low enough to qualify based on the federal poverty level.

If you’re 65 or older or have a disability, you’re eligible for Medicaid if you have limited resources and receive Supplemental Security Income (SSI), a safety-net program for an individual with income of $967 or less a month in 2025.

You’ll also qualify if you’re eligible for one of four Medicare Savings Programs, which provide Medicaid coverage for out-of-pocket Medicare expenses. To qualify in 2025, limits on income for an individual are $1,325 to $5,302 a month, depending on the program, and an individual’s financial resources, such as bank and investment accounts, need to be $4,000 to $9,660 or less although some states differ on what they count as income and resources.

The program with the lowest income eligibility level covers almost all Medicare costs. The highest covers only Medicare premiums. Medicare Savings Programs are a form of Medicaid.

To qualify for Medicaid help for long-term care, you must have few or no assets other than your home and need a nursing-home level of care. That generally means you need hands-on help with basic daily tasks, such as bathing, dressing, eating or going to the bathroom. Often assistance with two or more of these activities is required.

States may offer additional options. For example, some states offer Medicaid to “medically needy” individuals whose incomes are too high to qualify for Medicaid using other criteria.

The expansion of Medicaid in 2014 allowed states to offer Medicaid to adults with incomes up to 138 percent of the federal poverty level, $21,597 for an individual in 2025. The District of Columbia and all but 10 states offer the expanded coverage.

Dual coverage helps Medicare beneficiaries

More than 15 percent of Medicaid recipients are what’s known as “dually eligible.” They qualify for both Medicaid and Medicare.

“What a lot of people don’t understand is that Medicare is not going to pay for things like long-term care,” says Carrie Graham, executive director of the Medicare Policy Initiative at Georgetown University’s Center on Health Insurance Reform. “Medicare beneficiaries have to pay out of pocket if they need someone to come help them with bathing, dressing or eating, and that is very, very expensive.”

9.2 million, adults 50 to 64 enrolled in Medicaid

8.2 million, adults 65 and older who have both Medicare and Medicaid

Medicaid, the nation’s largest payer for long-term care services, covers 60 percent of all nursing home residents. Many are the oldest and most frail adults on Medicare.

For dual eligibles, Medicaid through the Medicare Savings Programs helps with the cost-sharing and out-of-pocket expenses that Medicare recipients must pay. Medicare Part B premiums alone can cost more than $2,000 a year.

While almost two-thirds of the dual eligibles are 65 and older, 36 percent are younger. Some of those younger have had lifelong disabilities. Others had to leave the workforce because they became disabled, qualifying for Medicare after receiving 24 months of Social Security Disability Insurance (SSDI) payments.

When someone has both Medicare and Medicaid, Medicare is the primary payer for medical and acute care. Medicaid then kicks in to help with premiums and sometimes other supplemental benefits that Medicare does not cover, such as vision and dental benefits and money for long-term care. The Medicaid payments can provide significant financial relief.

Medicaid often takes a new name in each state

Since Medicaid is jointly run by the federal government and the states, a program in one state may look vastly different from a program in another state.

Some states even identify their programs by different names. For example, Tennessee’s program is widely known as TennCare, California’s program is called Medi-Cal and Oklahoma’s program is frequently referred to as SoonerCare.

The federal government mandates certain coverage, such as long-term care and emergency and nonemergency medical care. But states can offer additional services under their own programs. For example, the state of Maryland offers comprehensive dental care for adults through its Medicaid program, while most other states offer adults only some emergency dental services.

Other states will pay for home care aides and adult day care to keep recipients in their homes as long as possible. This option can cost less than nursing home care and fits with what 75 percent of adults 50 and older want for themselves, according to a 2024 AARP survey.

Some states offer coverage to noncitizens

States also have varied their approach to offering benefits to immigrants. Under previous federal law, certain lawfully present immigrants can receive Medicaid benefits, say, an immigrant with a green card, which signifies permanent legal residency.

The number of noncitizen immigrants who receive Medicaid benefits is low, accounting for 6 percent of Medicaid and CHIP recipients. Starting Oct. 1, 2026, the One Big Beautiful Bill Act, this year’s budget law, will exclude people granted asylum, some domestic violence victims, refugees and a few other legal immigrant groups.

However, some states offer more robust coverage to immigrants. For example, last year California extended Medi-Cal to low-income undocumented immigrants using state dollars. This year the state is closing the program to many new noncitizens to save money.

Changes coming because of the new federal law

While proponents of the new federal law say its proposals will curb wasteful spending in the Medicaid program, many argue that instead it will cause millions of Americans to lose coverage.

“At its heart, the Medicaid reconciliation provisions reduce federal spending by reducing the number of people with Medicaid,” says Alice Burns, associate director with KFF’s Program on Medicaid and the Uninsured. “Most of the savings come because of enrollment losses.”

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Work requirements. One provision expected to spark some of those enrollment losses is the introduction of work requirements for people ages 19 to 64, who would have to show proof of working 80 hours a month at a job or other qualifying activities. That could hurt workers, including those 50 to 64, says Monique Morrissey, senior economist for the Economic Policy Institute.

“If the economy tips into recession, older workers are less likely to lose their jobs, but they have a harder time finding new ones,” she says. Without a job, those workers could lose coverage.

If a disability prevents Medicaid recipients from working, proving eligibility will also be difficult, Morrissey says. Complicated paperwork may cause some people to lose coverage if it’s not filled out properly, even if they are eligible.

“Millions of caregivers are in a situation where their own insurance comes through Medicaid,” says Alan Weil, director of the AARP Public Policy Institute. Though the work requirement legislation says exceptions to that rule will be made for caregivers, the law is vague about how that’s defined, and family members could face red tape receiving and maintaining an exemption.

By the end of 2020, 13 states received waivers to test-drive the idea of work requirements. Arkansas was the first state to put work requirements in place before a federal judge determined the requirements violated the law.

The only other state to put its waiver in place, Georgia, has a program that is operating now. It offers Medicaid coverage to certain adults who otherwise wouldn’t be eligible if they meet work requirements. Georgia is one of the 10 states that has not opted into 2014’s Medicaid expansion.

More frequent eligibility scrutiny. The new federal law and subsequent regulations could cut access to health care for people who have been eligible under the Medicaid expansion. Those recipients would have to show their eligibility every six months, rather than the present 12 months.

Since the law gets rid of Biden-era rules that simplify enrollment, some could lose insurance because of administrative processes and red tape, KFF’s Burns says.

States’ potential withdrawal from expansion. The law also would provide lower matching federal money to certain states that offer services to immigrants. Some states have laws that trigger the end of expansion coverage if federal money is reduced.

Nearly half the 50- to 64-year-olds on Medicaid are eligible because of the 2014 expansion, Burns says.

Modifications could create a domino effect

Without access to Medicaid, many older adults may not be able to afford home health services or nursing home care when they need them. That also could affect their Generation X children, who would be compelled to consider other caregiving options.

While Medicaid pays for a nursing home stay, states can choose whether to cover in-home health care services. All states have waivers to provide home-based care, but Georgetown’s Graham worries that those services may be at risk, too.

Safety net in a health crisis. A major illness and the need for long-term care could lead someone to spend all their savings and apply for Medicaid because they have no choice, she says. “Everyone is at risk for needing Medicaid if they get to the point where they need care,” Graham says.

More than half of 65-year-olds will need some form of long-term care in the future, according to a 2022 federal study. Even a significant minority of high earners are expected to end up on Medicaid because the costs will have depleted their personal savings.

Respite care at risk. With fewer people having access to Medicaid, caregivers of all ages could face new challenges.

“Medicaid can provide access to respite services for people who are relying on ... caregivers who are taking care of people on Medicaid,” AARP’s Weil says.

More expensive insurance. For Americans 50 and older, losing access to Medicaid would mean finding a new private health insurance policy.

“Premiums will be a lot higher if you’re older,” Weil says. But enhanced premium tax credits in the ACA Marketplace, which can make health insurance more affordable for families whose modified adjusted gross income is up to 400 percent of the federal poverty level, expire at the end of 2025.

People of any age who receive the enhanced premium subsidies see their health insurance premiums reduced an average of 44 percent, KFF said in July 2024.

Without a premium tax credit, the least expensive ACA Marketplace health plan in suburban Omaha, Nebraska, for example, is $1,006.25 a month for a 63-year-old man who doesn’t smoke. That compares to $408.36 a month for a 33-year-old man in the same circumstances. Both policies have $7,500 deductibles.

‘At its heart, the Medicaid reconciliation provisions reduce federal spending by reducing the number of people with Medicaid. Most of the savings come because of enrollment losses.’

— Alice Burns, KFF’s Program on Medicaid and the Uninsured

About 1 in 10 adults age 55 to 64 have no health insurance at all, according to prepandemic data from the National Center for Health Statistics. High price was cited as the main reason for lack of insurance, according to a 2024 KFF study of federal data for adults 18 to 64.

Those with no insurance have less access to preventive care. And when uninsured people need to go to a hospital, they often are sicker.

Federal law prohibits hospitals that receive Medicare money from refusing to treat patients in an emergency even if they can’t pay. But uncompensated care and its effect on hospital revenues could force them to cut staff or eliminate some services, according to the Commonwealth Fund, a New York-based nonprofit foundation that studies the health care system.

Even if you don’t need Medicaid now, you or a loved one might need it in the future during a health crisis.

“People underestimate the likelihood that they will need support,” Weil says.

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This story, originally published May 29, 2025, was updated to reflect passage of the One Big Beautiful Bill Act and Medicaid’s 60th anniversary.

Tamara E. Holmes is a Washington-based writer and editor. She has written extensively about money, entrepreneurship and careers for more than two decades. Her work has appeared in such publications as USA Today, Working Mother and Essence.

Tobey Oliver, director of health programs at the AARP Public Policy Institute, previously worked at the Centers for Medicare and Medicaid Services (CMS) and the National Opinion Research Center (NORC) at the University of Chicago developing Medicare and Medicaid projects. She earned her master’s degree in public policy from George Mason University and her juris doctor degree from the University of California, Berkeley, School of Law.

Brendan Flinn, director of long-term services and supports at the AARP Public Policy Institute, previously worked as director of Medicaid and home and community-based services at LeadingAge, a nonprofit that represents aging services organizations, and as a research analyst at consulting firm The Lewin Group’s Center for Aging and Disability Policy. He earned his master’s degree in public health and health policy from George Washington University