Page Reviewed / Updated - Dec. 2013
It is easiest to think of Share of Cost (SOC) as a partial acceptance into the Medicaid program (or Medi-Cal in California). It is intended to assist individuals whose incomes exceed the Medicaid limit but who have unusually high medical expenses which they cannot afford. Share of Cost works as follows; the state reviews an individual's income and medical needs and costs to determine if they can afford their necessary care. If it is decided they cannot afford their care, the states decides how much of their monthly income they can afford to pay toward their care and then covers the remainder of the cost.
For example, an elderly woman has monthly income of $1,200 and the state determines she needs $800 of that to live on each month (this is referred to as her "monthly maintenance need"). Under Share of Cost, she would be required to pay the additional $400 / month to her medical providers. Her "Share of Cost" would be $400. Any medical expenses she has in excess of the $400 will be paid by the state
If, in any given month, she does not have over $400 in medical bills, she pays only her expenses and is allowed to keep the remainder. For example, in June her income is $1,200 and she has $300 in medical expenses. She keeps her $800 monthly maintenance need, pays the $300 in medical bills and keeps the remaining $100 of her income, so in June she has a true income of $900.
"Medically Needy" describes a type of Medicaid program that looks at the individual's income and medical expenses as opposed to having a hard income limit which is called "Categorically Needy". Share of Cost is one model of consumer payment within the group of Medically Needy Medicaid programs.
California (Medi-Cal), Florida and Tennessee (TennCare) have share of cost Medicaid.
The following states offer Medically Needy Medicaid programs.
Share of Cost (SOC) and insurance deductibles are similar in that once the consumer has spent a specific amount, then insurance covers the remainder. However deductibles are at a set level shared by everyone in a particular type of insurance. Share of Cost is specific to the individual. One can think of SOC as a custom deductible based on one's income and medical expenses.
Co-pays, or co-payment amounts, are the portion of a specific medical expense for which the consumer is responsible. This is different from SOC because with SOC all medical expenses are considered in aggregate while with co-payments each procedure or medication will have a specific co-payment amount.
If one thinks of Share of Cost as a partial acceptance into Medicaid, then one can avoid Share of Cost by being fully or unconditionally accepted into Medicaid. Qualifying for Medicaid unconditionally means the individual has income and assets less than the eligibility limits; typically less than $2,130 in monthly income and less than $2,000 in assets excluding their home and vehicle. Details available here.
There are multiple techniques used to lower one's income and assets to meet Medicaid eligibility limits yet still preserve those assets for one's family. Read about pooled income trusts, which help lower one's income and funeral trusts which lower one's assets.
Qualifying for Medicaid is complicated, there are professional advisors, both public and private, that help families to qualify. Medicaid is managed at the state level; find a Medicaid Planner in your area to help.