Pennsylvania Medicaid Income & Asset Limits for Nursing Homes & In-Home Long Term Care

Pennsylvania Medicaid Long-Term Care Definition

Medicaid is a health care program for low-income individuals of all ages. While there are many different coverage groups, the focus here is long-term care Medicaid eligibility for senior Pennsylvania residents, aged 65 and over. While Medicaid-funded nursing home care and assisted living services are available, PA Medicaid also pays for non-medical support services to help frail seniors live at home or in the home of a loved one. There are three categories of Medicaid long-term care programs for which Pennsylvania seniors may be eligible.

1) Institutional / Nursing Home Medicaid – An entitlement; anyone who is eligible will receive assistance. Benefits are provided only in nursing homes.

2) Medicaid Waivers / Home and Community Based Services (HCBS) – Not an entitlement; there are a limited number of participants and waiting lists to receive benefits may exist. Intended to prevent and delay the need for nursing home admissions, services and supports are provided at home, adult day care, or in assisted living. More on Waivers.

3) Regular Medicaid / Aged Blind and Disabled – An entitlement; meeting the eligibility requirements ensures one will receive assistance. Various long-term care services, such as personal care assistance or adult day care, may be available.

Medicaid in Pennsylvania is called Medical Assistance (MA). While this program is jointly funded by the state and federal government, it is administered by the state. Pennsylvania’s Department of Human Services is the administering agency.

Income & Asset Limits for Eligibility

The three categories of Medicaid long-term care programs have differing eligibility requirements. Further complicating financial eligibility is that the criteria changes annually, varies with marital status, and Pennsylvania offers multiple pathways towards eligibility.

The table below provides a quick reference to allow seniors to determine if they might be immediately eligible for long-term care from a PA Medicaid program. One can also take the Medicaid Eligibility Test. IMPORTANT: Not meeting all of the criteria does not mean one is ineligible or cannot become eligible for Medicaid in Pennsylvania. More.

Income Definition & Exceptions

Countable vs. Non-Countable Income
Nearly any income from any source that a Medicaid applicant receives is counted towards Medicaid’s income limit. This includes employment wages, alimony payments, pension payments, Social Security Disability Income, Social Security Income, IRA withdrawals, and stock dividends. Nationally, Holocaust restitution payments are not counted as income. Furthermore, in PA, VA Aid & Attendance or Housebound payments, which are above and beyond the Basic VA Pension, do not count as income.

Treatment of Income for a Couple
When only one spouse of a married couple applies for Nursing Home Medicaid or a Medicaid Waiver, only the income of the applicant is counted. This means the income of the non-applicant spouse is disregarded and does not impact the income eligibility of their spouse. The non-applicant spouse (often called the community spouse), however, may be entitled to a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their applicant spouse. In Pennsylvania, this is called a Community Spouse Monthly Maintenance Needs Allowance (CSMMNA) and is the minimum amount of income a non-applicant spouse is said to require to avoid spousal impoverishment.

The MMMNA in PA is $2,465 (eff. 7/1/23 – 6/30/24). If a non-applicant’s monthly income falls under $2,465, income can be transferred to them from their applicant spouse, bringing their income up to this level. A non-applicant spouse can further increase their Spousal Income Allowance if their housing and utility costs exceed a “shelter standard” of $740 / month (eff. 7/1/23 – 6/30/24). However, in 2024, a Spousal Income Allowance cannot push a non-applicant’s total monthly income over $3,853.50. This is the Maximum Monthly Maintenance Needs Allowance. Learn more about how this allowance is calculated.

Income is counted differently when only one spouse applies for Regular Medicaid / Aged Blind and Disabled; the income of both spouses, regardless of if one or both spouses are applying for benefits, is counted towards the income limit. Furthermore, there is no Spousal Income Allowance for a non-applicant spouse. More on how income is counted for Medicaid eligibility purposes.

Asset Definition & Exceptions

Countable vs. Non-Countable Assets
The value of countable assets are added together and counted towards Medicaid’s asset limit. This includes stocks, bonds, investments, and bank accounts (savings and checking). In Pennsylvania, the applicant’s IRA / 401K is counted. There are also many assets that are considered exempt (non-countable). Exemptions include personal belongings, household items, a vehicle, irrevocable burial reserves (up to 25% of the average cost of burial in one’s area), and generally one’s primary home. In PA, the IRA / 410K of a non-applicant spouse is exempt.

Treatment of Assets for a Couple
All assets of a married couple are considered jointly owned. This holds true regardless of the long-term care Medicaid program for which one is applying and regardless of it one or both spouses are applicants. However, a Spousal Impoverishment Rule permits the non-applicant spouse of a Medicaid nursing home or Waiver applicant a Community Spouse Resource Allowance (CSRA). In Pennsylvania, this is the non-applicant spouse’s “protected share”. In 2024, the community spouse (the non-applicant spouse) can retain 50% of the couple’s assets, up to a maximum of $154,140. If the non-applicant’s half of the assets falls under $30,828, 100% of the assets, up to $30,828 can be retained by the non-applicant.

Medicaid’s Look-Back Rule
Pennsylvania has a 5-year Medicaid Look-Back Period that immediately precedes one’s date of Nursing Home Medicaid or Medicaid Waiver application. During this period, Medicaid checks to ensure no assets were gifted or sold under fair market value. When persons have done this, even non-applicant spouses, the Medicaid agency assumes it was done to meet Medicaid’s asset limit. Violating the Look-Back Rule results in a Penalty Period of Medicaid ineligibility. There is no Look-Back Period for Regular Medicaid.

The U.S. Federal Gift Tax Rule does not extend to Medicaid eligibility. In 2024, this rule allows one to gift up to $18,000 per recipient without filing a Gift Tax Return. Gifting under this rule violates Medicaid’s 5-year Look-Back Period.

Pennsylvania Medicaid Home Exemption Rules

For home exemption, the Medicaid applicant or their spouse must live in their home. If there is no spouse in the home, there is a home equity interest limit of $713,000 (in 2024). Home equity is the value of the home, minus any outstanding debt against it. Equity interest is the amount of home equity owned by the applicant. Furthermore, if there is not a spouse in the home, and the Medicaid applicant does not live there, the applicant must have Intent to Return. For Regular Medicaid, there is no home equity interest limit. Other exemptions exist.

While one’s home is usually exempt from Medicaid’s asset limit, it is not exempt from Medicaid’s Estate Recovery Program. Following a long-term care Medicaid beneficiary’s death, Pennsylvania’s Medicaid agency attempts reimbursement of care costs through whatever estate of the deceased still remains. This is often the home. Without proper planning strategies in place, the home will be used to reimburse Medicaid for providing care rather than going to family as inheritance.

Medical / Functional Need Requirements

An applicant must have a functional need for long-term care Medicaid. For Nursing Home Medicaid and Medicaid Waivers, a Nursing Facility Level of Care (NFLOC) is required. Furthermore, additional criteria may need to be met for specific program benefits. As an example, for a Medicaid Waiver to cover the cost of home modifications, an inability to safely and independently live at home without modifications may be required. For long-term care services via the Regular Medicaid program, a functional need with the Activities of Daily Living (ADLs) is required, but a NFLOC is not necessarily required.

Qualifying When Over the Limits

For Pennsylvania residents, aged 65 and over, who do not meet the financial eligibility requirements above, there are other ways to qualify for Medicaid.

1) Medically Needy Pathway – Pennsylvania has a Medically Needy Only Medical Assistance (MNO-MA) program for seniors who have income over Medicaid’s income limit. Sometimes called a “Spend-down” program, persons can become income-eligible by spending the majority of their income on medical expenses, including nursing home bills. In 2024, the Medically Needy Income Limit (MNIL) is $425 / month for an individual and $442 / month for a couple. The “spend down” amount, which can be thought of as a deductible, is the difference between one’s monthly income and the MNIL. In PA, the spend down amount is calculated for a 6-month period. Once one has met their spend down, they will be income-eligible for Medicaid services for the remainder of the period. The MNO-MA asset limits are $2,400 for an individual and $3,200 for a couple. There is no additional asset disregard.

2) Asset Spend Down – Seniors who have assets over Medicaid’s limit can still become asset-eligible by spending down extra assets on non-countable ones. Examples include making home modifications (i.e. the addition of wheelchair ramps or stair lifts) prepaying funeral and burial expenses, and paying off debt. Remember, assets cannot be gifted or sold under fair market value, as this violates Medicaid’s Look-Back Rule. It is recommended one keep documentation of how assets were spent as proof this rule was not violated.

3) Medicaid Planning – The majority of persons considering Medicaid are “over-income” and / or “over-asset”, but they still cannot afford their cost of care. For these persons, Medicaid planning exists. By working with a Medicaid Planning Professional, families can employ a variety of strategies to help them become Medicaid-eligible, as well as to protect their home from Medicaid’s Estate Recovery Program. Connect with a Medicaid Planner.

Specific Pennsylvania Medicaid Programs

In addition to paying for nursing home care, Pennsylvania Medicaid offers the following programs relevant to the elderly that helps them to live at home or in the community.

1) Community HealthChoices (CHC) Program – This is a Medicaid managed care program for state residents who are aged or physically disabled. A previously available program, the Pennsylvania Department of Aging (PDA) Waiver, transitioned into this program. Available benefits may include adult day care, personal care assistance, home modifications, home health services, and more. A program option, Services My Way (SMW), allows persons to self-direct their own care. Beneficiaries are able to choose their own care providers, including the ability to hire some family members.

2) Program of All-Inclusive Care for the Elderly (PACE) – The benefits of Medicaid, including long-term care services, and Medicare are combined into one program. Additional benefits, such as dental and eye care, may be available.

3) Money Follows the Person – This federal program helps institutionalized persons who are eligible for Medicaid to transition back home or into the community.

How to Apply for Pennsylvania Medicaid

Elderly Pennsylvania residents can apply online for long-term care Medicaid / Medical Assistance at COMPASS or fill out a paper application, “Medical Assistance (Medicaid) Financial Eligibility Application for Long Term Care, Supports and Services”, and submit it to their local County Assistance Office (CAO). Persons can also apply in person at their CAO or via phone by calling the Health Care Coverage Consumer Service Center at 866-550-4355. One’s local Area Agency on Aging office office might be helpful in answering Medicaid program questions and offering application assistance. The application process may vary based on the program for which one is applying.

Prior to submitting a Medical Assistance application in Pennsylvania, seniors must be positive that all eligibility requirements are met. Persons over the income and / or asset limit(s), should strongly consider Medicaid Planning for the best chance of acceptance into a Medicaid program. The application process can be lengthy and challenging, as documentation must be included with the application. Read more on the application process for long-term care Medicaid.