Medicaid eligibility is exceedingly complex and to provide the minute details is beyond the mission of this website. That said, there are some over-arching eligibility principles which should be mentioned. Medicaid eligibility is determined at many levels. Each state has its own requirements which can change every year. Within each state, each target constituent group has its own requirements. For example, elderly and frail individuals have different requirements than pregnant women. Finally, nursing home or long term care Medicaid may have different requirements than Medicaid waivers, and each waiver may have its own requirements.
In the context of the elderly, Medicaid typically has two types of eligibility requirements; functional and financial. Functionally, depending on the program, individuals must require the level of care typically provided in a nursing home, intermediate care facility or at a minimum they must require assistance with the activities of daily living. Financially, Medicaid eligibility looks at both the applicant’s (and their spouse’s) income and their total resources or countable assets. Also considered are past asset transfers dating as far back as five years (60 months) preceding their application date.
A rule of thumb for the year 2017 is an individual’s income must be less than $2,205 / month and their resources, excluding their home and vehicle, must be valued at less than $2,000. However, in some states the income limit is as low as $500 / month and in others as high as $5,000 / month (when combined with a non-applying spouse) or even higher if the individual has exceptionally high care expenses. The resource limit is some states is as high as $20,000. What is defined as a countable resource also changes by state. For assistance determining your eligibility, please use our Find a Planner tool.
Further complicating eligibility is the concept of a Community Spouse. When one spouse requires care and the other spouse is healthy and can live independently (at home or in the community), they are considered a “community spouse”. In this situation, a complicated division of assets is necessary and the cost for the community spouse to continue living independently is considered a factor in determining Medicaid eligibility. In 2017, community spouses can have a maximum monthly income of $3,022.50 and a total of countable assets valued at no greater than $120,900. Again, the home is excluded provided the community spouse lives in and the value of their home equity does not exceed $560,000 (or $840,000 in some states).
The complexity of Medicaid eligibility underscores the important of Medicaid planning. Learn more about what Medicaid planners do.