Because they live in a State that has 'expanded' Medicaid, if you are over age 21, YES, you can claim them as a dependent and your income will not be included to determine their Medicaid eligibility.
The following is ONLY for States that 'expanded' Medicaid'. States that did not 'expand' Medicaid may go by other rules.
http://kff.org/health-reform/state-indicator/state-activity-around-expanding-medicaid-under-the-affo...
(2) Basic rule for individuals claimed as a tax dependent.
In the case of an individual who expects to be claimed as a tax
dependent by another taxpayer for the taxable year in which an initial
determination or renewal of eligibility is being made, the household is
the household of the taxpayer claiming such individual as a tax
dependent, except that the household must be determined in accordance
with paragraph (f)(3) of this section in the case of—
(i)
Individuals other than a spouse or a biological, adopted, or step child
who expect to be claimed as a tax dependent by another taxpayer;
(ii)
Individuals under the age specified by the State under paragraph
(f)(3)(iv) of this section who expect to be claimed by one parent as a
tax dependent and are living with both parents but whose parents do not
expect to file a joint tax return; and
(iii) Individuals under the
age specified by the State under paragraph (f)(3)(iv) of this section
who expect to be claimed as a tax dependent by a non-custodial parent. So your parent is calculated under (f)(3) which says:
(3) Rules for individuals who neither file a tax return nor are claimed as a tax dependent.
In the case of individuals who do not expect to file a Federal tax
return and do not expect to be claimed as a tax dependent for the
taxable year in which an initial determination or renewal of eligibility
is being made, or who are described in paragraph (f)(2)(i), (f)(2)(ii),
or (f)(2)(iii) of this section, the household consists of the
individual and, if living with the individual—
(i) The individual's spouse;
(ii) The individual's natural, adopted and step children under the age specified in paragraph (f)(3)(iv) of this section; and
(iii)
In the case of individuals under the age specified in paragraph
(f)(3)(iv) of this section, the individual's natural, adopted and step
parents and natural, adoptive and step siblings under the age specified
in paragraph (f)(3)(iv) of this section.
(iv) The age specified in this paragraph is either of the following, as elected by the agency in the State plan—
(A) Age 19; or
(B) Age 19 or, in the case of full-time students, age 21.
http://www.ecfr.gov/cgi-bin/text-idx?SID=f54e4bfca7c7d663f36cb10c0675f77b&node=42:4.0.1.1.6.7.67.4&r...
