Different income-counting rules can lead to confusion among eligible families, as well as providers and organizations helping with outreach. To avoid complicating the message with details about net or countable income and how the rules are different for the two programs, they often use the net income standard for Medicaid and the gross income standard for the separate State program. Without more information about available deductions, these standards can be misleading. They are not aware that expenses, such as for child care, will be taken into account when Medicaid eligibility is determined. Families may apply to the wrong program or choose not to have their application forwarded to Medicaid because they believe their children are not eligible for Medicaid.
States have various options for aligning their income rules.
Federal law sets out the rules for calculating a child's family income for determining Medicaid eligibility. These are the minimum requirements. Federal law permits States to adopt less restrictive income-counting rules without a waiver. This can be a positive development for uninsured children but would result in additional State expenditures. Similar considerations apply to alignment of asset rules.