Kentucky Medicaid Home and Community Based Waiver (HCB) Waiver: Benefits & Eligibility

Last updated: October 18, 2021


Overview of Kentucky’s Home and Community Based Waiver

Kentucky’s Home and Community Based Waiver, or HCB Waiver, provides home and community-based services (HCBS) for elderly and disabled Kentucky residents who are at risk of being institutionalized (being placed in a nursing home). The benefits received vary based on the needs and circumstances of the program participant. For instance, a program participant with no informal support might receive home delivered meals, in-home personal care assistance, and home modifications for safety and accessibility. In contrast, a program participant who lives with a family member might attend adult day health care and receive respite care to relieve the family caregiver.

The services offered under this program may be provided by licensed care workers or program participants have the option of “participant directed services”. This consumer-directed option allows a program participant to hire the caregiver of their choosing for services that are non-medical and received outside of a residential setting. Friends and relatives, including adult children and spouses, can be hired to provide care. A financial management services agency handles the financial aspects of employment responsibilities such as tax withholding and caregiver payments.

Program participants can live in one’s home or the home of a loved one. Persons cannot live in an assisted living residence or an adult foster care home and be eligible for the HCB Waiver.

The HCB Waiver is not an entitlement program, which means meeting eligibility requirements does not equate to immediate receipt of program benefits. Instead, the waiver has a limited number of participant enrollment slots, and when these slots are full, a waitlist for program participation forms. A portion of these slots are reserved specifically for persons residing in nursing home facilities who wish to transition back to community living.

The Home and Community Based Waiver is a 1915(c) HCBS (home and community based services) Medicaid waiver.

 What are 1915(c) HCBS Medicaid Waivers?
Historically Medicaid only paid for long-term care in nursing homes. 1915(c) HCBS Medicaid Waivers allow states to offer benefits outside of these institutions. “HCBS” stands for “Home and Community Based Services. The goal of HCBS is to delay or prevent institutionalization and to that end, care may be provided in one’s home, the home of a relative, assisted living, or adult foster care / adult family living. Waivers can target specific groups who require a nursing home level of care and are at risk of institutionalization such as the elderly, disabled, or persons with Alzheimer’s. Waivers are not entitlements. This means that meeting eligibility criteria does not guarantee receipt of benefits, as there are a limited number of slots for program participants.


Benefits of the Home and Community Based Waiver

Follows is a list of the benefits available via the HCB Waiver. An individual care plan will determine which services and supports a program participant will receive.

– Adult Day Health Care – supervised care, including nursing services, in a community group setting
– Attendant Care – includes assistance with activities of daily living and instrumental activities of daily living, such as bathing, dressing, toileting, meal preparation, light housework, grocery shopping
– Case Management
– Good and Services – i.e., adult diapers, nutritional supplements
– Home and Community Supports – for persons self-directing their care – includes assistance with activities of daily living and instrumental activities of daily living, such as bathing, dressing, toileting, meal preparation, light housework, grocery shopping
– Home Meal Delivery
– Home Modifications – i.e., wheelchair ramps, grab bars, pedestal sinks, widening of doorways
– Participant Directed Coordination
– Respite Care – specialized and non-specialized short-term care to alleviate an unpaid primary caregiver


Eligibility Requirements for Kentucky’s Home and Community Based Waiver

The HCB Waiver is for Kentucky residents who are elderly (65+), or younger (0-64) if disabled, that are at risk of nursing home placement. Disabled persons can continue to receive waiver services upon turning 65. Additional eligibility criteria are as follows below.

 The American Council on Aging provides a quick and easy Medicaid eligibility test for Kentucky seniors requiring long term care. Start here.


Financial Criteria: Income, Assets & Home Ownership

The applicant income limit is equivalent to 300% of the Federal Benefit Rate (FBR), which increases on an annual basis in January. In 2021, an applicant, regardless of marital status, can have a monthly income up to $2,382. When both spouses are applicants, each spouse is considered individually, with each spouse allowed income up to $2,382 / month. When only one spouse is an applicant, the income of the non-applicant spouse is not counted towards the income eligibility of his/her spouse. Furthermore, monthly income from the applicant spouse can be transferred to the non-applicant spouse as a spousal income allowance, also called a monthly maintenance needs allowance. There is a minimum income allowance, set at $2,177.50 / month (effective July 2021 – June 2022), which is intended to bring a non-applicant spouse’s monthly income up to this amount. There is also a maximum income allowance, which is $3,259.50 / month (effective January 2021 – December 2021), and is dependent on the non-applicant spouse’s shelter and utility costs. This monthly maintenance needs allowance is intended to ensure the non-applicant spouse does not become impoverished.

In 2021, the asset limit is $2,000 for a single applicant. For married couples, with both spouses as applicants, each spouse can have up to $2,000 in assets. When only one spouse is an applicant, the assets of both the applicant and non-applicant spouse are limited, though the non-applicant spouse is allocated a larger portion of the assets to prevent spousal impoverishment. (Unlike with income, Medicaid considers the assets of a married couple to be jointly owned). In this case, the applicant spouse can retain up to $2,000 in assets and the non-applicant spouse can keep up to $130,380. This larger allocation of assets to the non-applicant spouse is called a community spouse resource allowance.

Some assets are not counted towards Medicaid’s asset limit. These generally include an applicant’s primary home, household furnishings and appliances, personal effects, and a vehicle.

Assets should not be given away or sold under fair market value within 60-months of long-term care Medicaid application. This is because Medicaid has a look back rule and violating it results in a penalty period of Medicaid ineligibility.

 To determine if you might have assets over KY Medicaid’s countable limit, and if so, receive an estimate of the amount, use our spend down calculator.  

Home Ownership
The home is often the highest valued asset a Medicaid applicant owns, and many persons worry that Medicaid will take their home. Fortunately, for eligibility purposes, KY Medicaid considers the home exempt (non-countable) in the following circumstances.

– The applicant lives in the home or has “intent” to return to the home and his / her home equity interest is no greater than $603,000. Home equity interest is the current value of the home minus any outstanding mortgage.
– A spouse lives in the home.
– The applicant has a disabled child living in the home.
– The applicant has a minor child living in the home.

To learn more about the potential of Medicaid taking the home, click here.


Medical Criteria: Functional Need

An applicant must require a nursing facility level of care (NFLOC). For the HCB Waiver, the tool used to determine if this level of care need is met is the Kentucky Home Assessment Tool (K-HAT). The ability / inability to complete activities of daily living (i.e., transferring from the bed to a chair, mobility, eating, toileting, bathing) and instrumental activities of daily living (i.e., preparing meals, light housecleaning, shopping for essentials) are considered. Relevant to some persons with Alzheimer’s disease or a related dementia, cognitive issues, such as disorientation, or behavioral problems, like regular attempts to leave the facility, may also be considered. A diagnosis of dementia in and of itself does not mean one will meet a NFLOC.

 For more information about long-term care Medicaid in Kentucky, click here.


Qualifying When Over the Limits

Having income and / or assets over Medicaid’s limit(s) does not mean an applicant cannot still qualify for Medicaid. There are a variety of planning strategies that can be used to help persons who would otherwise be ineligible to become eligible. Some of these strategies are fairly easy to implement, and others, exceedingly complex. Below are the most common.

When persons have income over the limits, Miller Trusts, also called a qualified income trust can help. “Excess” income is deposited into the trust, no longer counting as income.

When persons have assets over the limits, trusts are an option. Irrevocable Funeral Trusts are pre-paid funeral and burial expense trusts that Medicaid does not count as assets. Another option are annuities that turns countable assets into a stream of income. While Medicaid Divorce is a viable option in some states for couples with a significant amount of “excess” assets, it unfortunately is not a good option in KY. There are many alternative solutions when the applicant has assets exceeding the limit.

Inadequate planning or improperly implementing a Medicaid planning strategy can result in a denial or delay of Medicaid benefits. Professional Medicaid planners are educated in the planning strategies available in the state of Kentucky to meet Medicaid’s financial eligibility criteria without jeopardizing Medicaid eligibility. Furthermore, there are additional planning strategies that not only help one meet Medicaid’s financial criteria, but also protects assets from Medicaid’s estate recovery program. These strategies often violate Medicaid’s 60-month look back rule, and therefore, should be implemented well in advance of the need for long-term care. However, there are some workarounds, and Medicaid planners are aware of them. For these reasons, it is highly suggested one consult a Medicaid planner for assistance in qualifying for Medicaid when over the income and / or asset limit(s). Find a Medicaid planner.


How to Apply for Kentucky’s Home and Community Based Waiver

Before You Apply

Prior to submitting an application for the HCB Waiver, applicants need to ensure they meet the eligibility criteria. Applying when over the income and / or asset limit(s) will be cause for denial of benefits. The American Council on Aging offers a free Medicaid eligibility test to determine if one might meet Medicaid’s eligibility criteria. Take the Medicaid eligibility test.

As part of the application process, applicants will need to gather documentation for submission. Examples include copies of Social Security and Medicare cards, bank statements up to 60-months prior to application, proof of income, and copies of life insurance policies, property deeds, and pre-need burial contracts. Unfortunately, a common reason applications are held up is required documentation is missing or not submitted in a timely manner.

Since the HCB Waiver is not an entitlement program, there may be a waitlist for program participation. The waiver is approved for a maximum of approximately 17,050 beneficiaries per year. In the case of a waitlist, it is thought an applicant’s access to a participant slot is based on the date of Medicaid application as opposed to severity of need.


Application Process

To apply for the HCB Waiver, applicants must be eligible for Kentucky Medicaid. Persons can apply online at kynect, over-the-phone by calling KY’s Department for Community Based Services (DCBS) at 855-306-8959, or via one’s regional DCBS office. Regional office information can be found here. Persons already enrolled in KY Medicaid can contact their local Aging and Disability Resource Center to apply for HCB Waiver services. Contact information can be found here.

For additional information about the Home and Community Based Waiver, click here. Persons can also call the waiver help desk at 844-784-5614. The Kentucky Department for Aging and Independent Living (DAIL) administers the HCB Medicaid waiver.


Approval Process & Timing

The Medicaid application process can take up to 3 months, or even longer, from the beginning of the application process through the receipt of the determination letter indicating approval or denial. Generally, it takes one several weeks to complete the application and gather all of the supportive documentation. If the application is not properly completed, or required documentation is missing, the application process will be delayed even further. In most cases, it takes between 45 and 90 days for the Medicaid agency to review and approve or deny one’s application. Based on law, Medicaid offices have up to 45 days to complete this process (up to 90 days for disability applications). However, despite the law, applications are sometimes delayed even further. Furthermore, as wait-lists may exist, approved applicants may spend many months waiting to receive benefits.

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