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 that should be mentioned. Medicaid eligibility is determined at many levels, and each state has its own requirements, which can and usually do change every year. Within each state, each target constituent group has its own requirements. For example, elderly and frail individuals have different requirements for eligibility than pregnant women or families with newborn children. Finally, nursing home or long term care Medicaid may have different requirements than Medicaid waivers. In addition, each waiver may have its own requirements for eligibility purposes.
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 or an intermediate care facility. This level of care might be referred to in a number of ways, such as Nursing Facility Level of Care (NFLOC) or simply Level of Care (LOC). If the program does not require this level of care, generally, at a minimum, program participants must require assistance with their Activities of Daily Living.
Activities of Daily Living are activities that are routinely done on a daily basis, such as bathing/grooming, dressing, eating, toileting, eating, and mobility. Sometimes it is also considered if seniors are able to perform their Instrumental Activities of Daily Living (IADL). These activities include preparing meals, shopping for essentials, housecleaning, and medication management. In most cases, a medical professional must do an assessment to determine one’s level of care needs or their inability to perform ADL’s and / or IADL’s.
Financially, Medicaid eligibility looks at both the applicant’s (and one’s spouse’s) income and their total resources, or said another way, their countable assets. Also considered are past asset transfers dating as far back as five years (60 months) preceding their application date (in all states but California which looks back 30 months). This is what is referred to as the Medicaid Look-Back Period, and if one is in violation of this period, they may be ineligible for Medicaid for a period of time.
A rule of thumb for the year 2018 is a single individual’s income must be less than $2,250/ 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, as income and asset limits are different for single persons versus married couples). This amount might be even higher if the individual has exceptionally high care expenses. The resource limit in some states is as high as $20,000. What is defined as a countable resource also differs by the state in which one resides. However, in addition to one’s home and vehicle, household belongings and personal effects are considered exempt (non-countable) assets. 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 2018, community spouses can have a maximum monthly income of $3,090 and a total of countable assets valued at no greater than $123,600. Again, the home is excluded provided the community spouse lives in it and the value of their home equity does not exceed $572,000 (or $858,000 in some states).
The complexity of Medicaid eligibility underscores the important of Medicaid planning. Learn more about what Medicaid planners do.