The Documentation Required to Verify Financial Eligibility for Long-Term Care Medicaid

Last updated: February 15, 2024


For long-term care Medicaid eligibility, there are income and asset limits. Generally speaking, for a single senior applicant, the income limit in 2023 is $2,742 per month and the asset limit is $2,000. But, how, you might be wondering, does Medicaid know if my income and assets are really under Medicaid’s financial eligibility requirements?

 Medicaid eligibility varies by state, program, and marital status. See specific state-by-state financial eligibility criteria, along with other Medicaid eligibility criteria.


How Medicaid Verifies Income

The state Medicaid agency generally places the burden of proof of monthly income on the applicant. This means that Medicaid requires an applicant to provide all requested and necessary documentation to verify what is written on the application is true. In this case, the applicant must provide proof (documentation) that their income, both earned and unearned, is equal to the amount on the application.

Required documentation might include the following: Current pay stubs, award letters (benefit verification letters) for Social Security, SSI, Railroad Retirement, or Veterans Affairs (VA), pension statements, alimony checks, dividend checks, written statements from one’s employer or a family member who is providing support, and income tax returns. A self-declaration of income form provided by the state Medicaid agency can be used when there is no other way to prove income.

Some states use a computerized system to cross reference a Medicaid applicant’s reported income to verify they are being truthful. For instance, in California, the Income Eligibility Verification System (IEVS) is an electronic database that matches the income information provided by the applicant to other databases to verify it is accurate. The databases in which income may be verified are Disability Insurance Benefits, California State Employment Development Department wages, state welfare information files, California State Franchise Tax Board interest and dividend files, Social Security Administration, and Medicare benefit files.

 Reporting Financial Changes: Seniors receiving Medicaid benefits must report any change in income or assets, such as an inheritance or increase in Veterans’ benefits, to their state’s Medicaid agency. Eligibility will need to be redetermined based on the new information. Failure to report changes can carry consequences, such as termination of Medicaid benefits, fines, reimbursement to Medicaid for expenses paid, and prosecution. Medicaid recipients must generally report any changes within 10 days.


How Medicaid Verifies Assets

Like with income, a state’s Medicaid agency commonly requires that Medicaid applicants provide proof of their assets. Prior to explaining how the state verifies assets, it is important to mention that not all assets are counted towards Medicaid’s asset limit. Exempt assets generally include an applicant’s primary home, household items and appliances, personal effects, a motor vehicle, burial plots, term life insurance, and in some cases, IRA / 401(k)retirement benefits.

Required documentation to be provided by the applicant might include checking, savings, money market, credit union, and certificates of deposit (CD) account statements, life insurance policies, deeds or appraisals for one’s home and other real estate, copies of stocks and bonds, deeds to burial plots, and copies of pre-paid funeral arrangements, annuities, and IRAs, and 401(k) retirement accounts. California is an exception, having eliminated their asset limit effective 1/1/24.

Relevant to assets, there is a Medicaid Look-Back Period in which a state’s Medicaid agency reviews all past asset transfers within 60-months (30-months in California) from the date of one’s long-term care Medicaid application. During this timeframe, which immediately precedes one’s date of application, Medicaid scrutinizes all asset transfers to ensure none were gifted or sold for less than fair market value. Violating this rule results in a Penalty Period of Medicaid ineligibility. Due to the “look back”, a long-term Medicaid applicant may be required to provide financial documentation for the past 5 years. California no longer has a Look-Back Period for asset transfers made on or after 1/1/24. While the state still has a “look back” for assets transferred prior to this date, it will fully be eliminated in July of 2026. Learn more.

Some states use electronic databases to verify, or cross verify, assets and ensure all assets were revealed on the application. For example, New York has an Asset Verification System (AVS) that electronically verifies financial accounts and real estate owned by aged, blind and disabled Medicaid applicants by exchanging information with local and national financial institutions and public records databases. (An individual in the aged, blind and disabled category could be applying for the state’s Regular Medicaid program, long-term Home and Community Based Services, or Nursing Home Medicaid). The system also considers Medicaid’s 5-year Look-Back Period and looks for financial accounts that were closed during the 5 years immediately preceding the date of one’s Medicaid Nursing Home application. Furthermore, AVS searches for possible transfer of assets that were in violation of the “look back”. This includes searching for the sale or transfer of any real estate. While the state currently does not have a Look-Back Period for Community Medicaid, the program through which long-term Home and Community Based Services are provided, the state plans to implement sometime in 2025.


What if My Income or Assets Are Higher than I Reported?

Medicaid applicants should never knowingly report income and / or assets as lower than they are. Doing so is a serious offense, and in fact, is illegal. In addition to potentially being convicted of a felony charge, there are several other possible consequences to lying on a Medicaid application. Persons can be punished with jail time, receive a significant fine, be required to repay Medicaid for the medical / long-term care expenses for which it paid, lose their Medicaid benefits, and never be able to qualify for Medicaid again.


Do My Income and Assets Have to Be Verified Again for Redetermination?

Yes, income and assets have to be verified again for Medicaid Redetermination. After initial acceptance into the Medicaid program, redetermination is generally every 12 months. The redetermination process is meant to ensure the senior Medicaid beneficiary still meets the eligibility criteria, such as income and assets. In some cases, electronic verification systems may be used during annual redeterminations to ensure that the requirements are still being met, and in other cases, the beneficiary may be required to provide documentation of proof.

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