Figuring out if your loved one is eligible for Medicaid long term care can be a challenge. There are different types of long term care, and certain care requirements that must be met for each. Income and asset eligibility limits vary by state and circumstance. Marital status, and the health care requirements for both spouses, also plays a role. Prior to answering the eligibility question, families must determine the type of Medicaid for which they will apply.
TYPES OF MEDICAID LONG TERM CARE
Medicaid offers three different programs that provide long term care – Nursing Home Medicaid, Home and Community Based Services (HCBS) Waivers and Aged Blind and Disabled (ABD) Medicaid. All three of these programs have varying eligibility requirements, and all three offer different types of care in different locales. It’s also important to remember that the Medicaid long term care programs will differ from state to state in terms of eligibility and benefits.
Nursing Home Medicaid
The straightforward name for this program is telling – it provides long term care in an institutionalized facility, aka a nursing home. Nursing Home Medicaid covers room and board at the facility, individual help with daily living activities, oversight of daily medications, and skilled nursing services. This care will only be provided at a Medicaid-certified nursing home facility, and the beneficiary must live at that facility on a full-time basis.
Nursing Home Medicaid is an entitlement, which means that if your loved one is eligible for the program they will automatically receive the benefits without being put on a wait-list. There are no exceptions to this rule.
If your loved one doesn’t want to go to a nursing home facility, or can’t for some reason, the Home and Community Based Services Waivers program can help pay for care in their home or community. A “community” can include assisted living residences, memory care homes (for people with Alzheimer’s, dementia or other similar cognitive conditions) and adult foster care homes. Under this program, Medicaid pays for all of the beneficiary’s medical costs and most of their personal care, but it won’t pay for any of the costs associated with living at home or in another “community” – rent, mortgage, utilities, food, etc.
Unlike Nursing Home Medicaid, HCBS Waivers are not an entitlement, which means that even if a candidate qualifies for the program, they could still be put on a wait-list before receiving any benefits.
The name of this program varies by state, but it can be thought of as Medicaid for aged, blind or disabled people. They receive coverage for a wide range of health care services, as well as some personal care services, but the ABD program is not as far-reaching as the HCBS Waivers program or Nursing Home Medicaid.
Like the HCBS Waivers program, ABD Medicaid provides care to people in their homes or communities, and these “communities” can include group homes, assisted living residences, memory care facilities or adult day care centers. Also like the HCBS Waivers program, ABD Medicaid will not cover living expenses such as room and board. Unlike the HCBS Waivers program, however, ABD Medicaid is an entitlement, so if the applicant meets the eligibility requirements, the program must deliver the required assistance with no exceptions and no wait-lists.
ELIGIBILITY CRITERIA FOR MEDICAID LONG TERM CARE
In order to be eligible for Nursing Home Medicaid, applicants must show the need for a “Nursing Home Level of Care” during a formal assessment conducted by a medical professional. Essentially, they must need considerable assistance with the basics of daily living (bathing, grooming, eating, toileting, mobility, etc.). The income and asset requirements for Nursing Home Medicaid are also strict. The bottom-line amounts vary by state, and change on an annual basis, but in general applicants must have an income less than $2,523 / month (as of 2022) and less than $2,000 in countable assets (a primary home, if owner-occupied is considered a non-countable asset). They won’t get to keep that monthly income, however, because most of it will go toward paying for their care at the nursing home, with the exception of a personal needs allowance, which is between $30-$150 / month and a spousal allowance (described below).
The same general income and asset limits apply to HCBS Waivers eligibility as applied to Nursing Home Medicaid – applicants must have less than $2,523 / month in income and less than $2,000 in assets. However, because HCBS Waivers participants must pay their own living expenses, they are allowed to keep much of their income to pay for those expenses. The level of care requirement for HCBS Waivers is also the same as the care requirement for Nursing Home Medicaid – the applicant must need considerable help with daily living activities.
ABD Medicaid has stricter financial eligibility limits than the other two long term care programs, but the level of care requirements are much more flexible. The income and asset limits vary by state. Approximately 25 states set the income figure at $841 / month in 2022. In the other 25 states, the limit is higher, but in no states does the limit exceed $1,500 / month. The asset limit is around $2000. As opposed to Nursing Home Medicaid and HCBS Waivers, healthy people can apply for ABD Medicaid. Those seeking long term care in the home through the ABD program only need to show a requirement for limited personal care assistance. If an applicant is only seeking medical coverage through ABD Medicaid, they only need to be aged (over 65), blind or disabled.
Even with the exact figures published here, it can be difficult for families to know if they or their loved one would be eligible as these figures will change with marital status (described below). In addition, what a family may consider as “income” and “assets” may be considered very differently by Medicaid. Get help understanding eligibility. Alternatively, for the most recent financial eligibility criteria for your state, type of Medicaid and marital situation, use this Medicaid Long Term Care Eligibility Requirements Search Tool.
MARITAL STATUS AND MEDICAID
All of the above income and asset eligibility limits are all for single applicants. The requirements become more complex when it comes to married applicants.
When only one spouse is applying for Nursing Home Medicaid or HCBS Waivers, only the income for the applying spouse is considered, and that income (in most states) must be below $2,523 / month. This means the income for the non-applicant spouse is not considered. Plus, the non-applicant spouse can also be allowed to keep some of the applicant’s monthly income, which is known as a Minimum Monthly Maintenance Needs Allowance (MMMNA), so that the non-applicant’s income can be as much as $3,435 / month in 2022 after adding the MMMNA to their monthly income (again these details are state-specific).
When both spouses are applying for Nursing Home Medicaid or HCBS Waivers, they can both have an income of $2,523 / month for a total of $5,046 / month. The same principle applies to asset requirements for married couples when both are applying for Nursing Home Medicaid or HCBS Waivers – they can both keep $2,000 in countable assets for a total of $4,000. Again, this can vary by state. In North Dakota, for example, a married couple can keep up to $6,000 in countable assets.
When only one spouse is applying for Nursing Home Medicaid or HCBS Waivers, the non-applicant spouse (sometimes called the community spouse) is allowed to retain considerably more assets – as much as $137,400 as of 2022. This is called the Community Spouse Resource Allowance (CSRA) and it also differs from state to state. In South Carolina, for example, the CSRA is only $66,480.
The rules are not the same when it comes to married couples applying for ABD Medicaid. There is no CSRA and the couple is allowed to keep just $3,000 in assets combined. As for income, while it varies by state, couples are typically limited to less than $1,500 / month in income.
Medicaid Planners are commonly used by couples in which one spouse is applying for Medicaid and the other is not. There are several reasons for this approach. Most importantly, it is difficult for an elderly individual to live on such a limited budget and mistakes are often made by both applicants and the Medicaid offices reviewing the applications. Medicaid Planners ensure a spouse retains as much of their income and assets as possible and can continue to live in a safe and comfortable manner. More on Medicaid Planning.
HOW TO BECOME ELIGIBLE FOR MEDICAID
Even if your loved one has too much income or too many assets to initially qualify for any of these long term care programs, there are still ways to make the numbers work and become eligible. This process is complicated, so getting some help from a Medicaid Planner makes a lot of sense here. Reputable Planners will always begin with a free consultation to ensure that both the families need their assistance and that they are not more economic approaches for the family.
When a family suspects their loved one will not meet Medicaid’s strict financial limits, they should not despair, and they should understand the following concepts. These concepts are key to helping applicant gain eligibility.
Countable vs. Exempt Assets
First, one needs to understand the differences between “countable assets” and “exempt assets.” Countable assets count towards the asset limit and include cash, bank accounts (savings, checking, money market), stocks, bonds, mutual funds, certificates of deposit, vacation homes and property other than the primary residence. In most states, 401K’s and IRA’s are also considered countable assets.
Exempt assets don’t count toward the asset limit and include the applicant’s primary home (more on that below), household furniture/appliances, personal items (clothing, engagement/wedding rings), an automobile, term life insurance, life insurance with a cash value no greater than $1,500, and pre-paid burial and funeral expenses. One’s home can only be exempt if the applicant, or their spouse, lives in it. In some states, “intent” to return and live in the home also works. The home’s equity interest must not exceed $603,000, or $906,000, depending on the state of residence (California, however, has no equity limit). It’s important to note that home equity interest is not the value of the home, but it’s the portion of the home that the applicant actually owns, which means it’s the market value of the home minus any debt against it, like a mortgage.
Medicaid Planners can assist in converting countable assets to exempt assets, thereby lowering an applicant’s countable assets and increasingly the likelihood that they will qualify.
Spending Down Assets
If the applicant is over the asset limit, they can “spend down” on the countable or non-exempt assets to get under the limit. This includes actions like paying off accrued debt on things like personal loans, vehicle loans, mortgages and credit cards; purchasing medical devices that are not covered by insurance like eyeglasses, hearing aids and dentures; making home modifications to improve access and safety; repairing vehicles; selling vehicles at a fair market value; creating a personal care agreement with a relative or close family friend; purchasing an annuity or an irrevocable funeral trust.
Before spending down on assets, one should be aware of the look-back period which is 60 months in most states and 30 months in California. During the Medicaid application process, the government will “look back” at the last 60 (or 30) months of the applicant’s financial history to make sure they didn’t try to hide any of their assets in order to qualify for Medicaid.
Spending Down Income
It’s also possible to spend down income, an option that is known as the “Medically Needy Pathway” in most states. This option takes into account the applicant’s income as well as their care costs and allows people who are not financially eligible to qualify for long term care Medicaid options by spending enough of their income on medical expenses to bring them below the Medically Needy Income Limit (MNIL), which varies by state. Each state also has a spend down period ranging from 1-6 months. Once the beneficiary has “spent down” to the MNIL for the period, they are eligible for Medicaid coverage for the remainder of that period.
For example, Maria lives in Florida, where the MNIL is $180 / month for a single senior candidate. If Maria has an income of $3,000 / month, but she spends $2,820 / month on medical expenses, she will reach the $180 / month MNIL for Florida and become eligible. Since Florida has a 1-month spend down period, she must meet this number every month to remain eligible on a month-by-month basis.
Medicare payments and other health insurance payments are allowable medical expenses in all states when it comes to spending down to meet income requirements. Other allowable expenses vary by state and can include physician bills, dental bills, nursing home services, eyeglasses, transportation to and from medical care, in-home medical/personal care and therapies (physical, speech, occupational).
There are two other ways to “spend down” to the income limit. First, some states (labeled “income cap” states) allow applicants who are over the Medicaid income limit to put their excess monthly income into a Qualified Income Trust (QIT). That money, which is managed by someone other than the Medicaid candidate, can only be used in very specific circumstances. Second, some states (like Illinois, New York and Missouri) offer a “pay-in spend down” option, which allows the applicant to pay the state Medicaid agency directly to get down to the income limit.
When spending down either income or assets, it is critical to do in accordance with Medicaid rules. Many financial transactions violate these rules and violations can results in a denial of Medicaid or a “penalty period” that can last years.