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 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 or Aged, Blind or Disabled Medicaid. In addition, each waiver may have its own requirements for eligibility purposes. This webpage focuses on Medicaid for seniors.
In the context of the elderly, Medicaid has two types of eligibility requirements: functional and financial. Functionally, (depending on the type of Medicaid program), individuals usually must require the level of care provided in a nursing home or an intermediate care facility. 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.
Income Eligibility Criteria
A rule of thumb for the year 2019 is a single individual, 65 years or older, must have income less than $2,313 / month. This applies to nursing home Medicaid, assisted living (in the states which cover it) and in-home care when these are provided through a state’s HCBS Waivers.
Income limits are different if the applicant is married and different again if both spouses are applying for Medicaid. Generally, married couples’ incomes are counted separately. So, in most states in 2019 each spouse is allowed $2,313 or a combined income of $4,626 / month. If only one spouse is applying for Medicaid, the non-applicant can be allocated some of the applicant’s income to enable them to continue living at home when their spouse goes into a nursing home. This is called the Minimum Monthly Maintenance Needs Allowance (MMMNA). In 2019 in most states, the maximum amount that can be allocated to a non-applicant spouse is $3,160.50 per month.
Nursing home Medicaid and HCBS Waivers typically have the same financial eligibility criteria. However, one can also receive home care from Medicaid under “Aged, Blind or Disabled” (ABD) Medicaid. This type of Medicaid usually has a much lower, more restrictive income limit. ABD Medicaid is commonly called Regular Medicaid or State Plan Medicaid and in 2019 in most states, ABD Medicaid’s income limit is $771 / month for a single applicant or $1,157 for a married couple with both spouses applying.
Medicaid candidates whose incomes exceed these limits might consider working with a Medicaid planner or reading the section below “Options When Over the Limits”.
The Medicaid asset limit, also called the “asset test”, is complicated. There are several rules of which the reader should be aware before trying to determine if he / she would pass the asset test. First, there are “countable assets” and “exempt assets”. In most cases, one’s home and furnishings are exempt. Second, unlike income which is counted separately, all of a married couples’ assets are considered to be joint assets and are counted. Third, asset transfers made by the applicant up to five years preceding their application date (or 2.5 years in California) are counted. This 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.
In 2019, in most states a single applicant, aged 65 or older is permitted up to $2,000 in countable assets to be eligible for nursing home Medicaid or HCBS Waivers (New York is a notable exception allowing $15,450). Aged, Blind or Disabled Medicaid usually have the same asset limit or permits just a few thousand dollars more in assets. State specific Medicaid asset limits are available here.
Married couples with both spouses applying are typically allowed to have $3,000 in countable assets to qualify for Medicaid. However, a big change comes with married couples in which only one spouse is applying. The applicant is permitted to transfer assets to the non-applicant spouse. This is referred to as a Community Spouse Resource Allowance. In 2019, community spouses can have countable assets valued at as much as $126,420. The home is excluded provided the community spouse lives in it and the value of their home equity does not exceed $585,000 (or $878,000 in some states or California which has no upper limit on home value).
The complexity of the Medicaid asset test underscores the important of Medicaid planning, a process by which many families who are over the Medicaid asset limit still manage to become Medicaid eligible. Learn more about what Medicaid planners do.
Level of Care Requirements
The “level of care” requirement for Medicaid for seniors changes based on the type of Medicaid program from which one is seeking assistance. Long term care in a nursing home requires a high level of care need. “Aged, Blind or Disabled” (ABD) Medicaid only requires that the applicant be aged (over 65), blind or disabled, they do not have to have a specific medical condition.
The level of care requirement for a nursing home might be referred to in a number of ways depending on one’s state of residence, such as Nursing Facility Level of Care (NFLOC) or simply Level of Care (LOC). The formal rules change by state as well. At a minimum, program participants must require assistance with their Activities of Daily Living. Activities of Daily Living are activities that are routinely done daily, 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.
A medical diagnosis of Alzheimer’s Disease, Parkinson’s or other dementia does not automatically mean an individual will meet Medicaid’s level of care requirements. However, typically the accompanying symptoms are adequately severe that persons with these conditions meet the requirements (or will soon as their conditions progress).
Eligibility by Care Type
Nursing Home Eligibility
Eligibility for Medicaid nursing home care is comprised of financial requirements and care requirements. The financial requirements are comprised of income limits and asset limits. These are described in detail above. The level of care requirement simply means that the applicant must require the level of care typically provided in a nursing home. While this may sound obvious, “Nursing Home Level of Care” (NHLOC) is actually a formal designation and requires a medical doctor to make this designation. Furthermore, the rules around what defines NHLOC change in each state.
Nursing home care by Medicaid is an entitlement. If one meets the financial and level of care requirements, a state must pay for that individual’s nursing home care. This is mentioned because nursing home / institutional Medicaid is different from home care and assisted living which are not entitlements. One can meet all the eligibility criteria for home care or assisted living and still be wait-listed to receive assistance.
Assisted Living Eligibility
Prior to discussing Medicaid’s eligibility requirements for assisted living / senior living, it is helpful for the reader to understand how Medicaid pays for assisted living. Persons residing in assisted living residences receive assistance from Medicaid either through HCBS Waivers or through the state’s Aged, Blind and Disabled (ABD) Medicaid.
HCBS Waivers are designed for persons who require a nursing home level of care but prefer to receive that care while living at home or living in assisted living (“memory care” for persons with Alzheimer’s). HCBS Waivers will not pay for the room and board costs of assisted living, they will only pay for care costs. Waivers are not entitlements. They are federally approved, state-specific programs that have limited enrollments. Many Waivers, especially those intended to help persons in assisted living, have waiting lists. To be clear, one can be financially and functionally eligible for an assisted living waiver and still not be able to enroll due to the wait-list.
The eligibility criteria for Medicaid assisted living through a Medicaid HCBS Waiver are the same as the eligibility requirements for nursing home care. Candidates must require “nursing home level of care” and meet the financial requirements described above.
Aged, Blind and Disabled (ABD) Medicaid provides help for persons in assisted living differently than Waivers. ABD Medicaid will provide beneficiaries with a caregiver and the beneficiary can use that caregiver at their place of residence. So, the individual could live at home or in an assisted living community. From Medicaid’s perspective, it is not important where they live so long as they do not live in a nursing home. ABD Medicaid will not pay for assisted living room and board, only for care. Nor will ABD Medicaid necessarily pay for ALL the individual’s care needs. The good news about ABD Medicaid (when compared to waivers) is that ABD Medicaid is an entitlement. If the applicant meets the eligibility criteria, the Medicaid program must provide them with the assistance they require.
ABD Medicaid typically has more restrictive income limits than Medicaid Waivers or nursing home care. However, ABD Medicaid does not typically insist that beneficiaries need a “nursing home level of care”. ABD Medicaid financial eligibility criteria are state-specific. One can view their state’s rules here.
In-Home Care Eligibility
Medicaid beneficiaries can receive assistance in their home through a Home and Community Based Services (HCBS) Waiver or through Aged, Blind and Disabled (ABD) Medicaid. These are two different types of Medicaid programs with different eligibility requirements.
HCBS Waivers, in all 50 states, offer home care as a benefit. Unfortunately, HCBS Waivers are not entitlements. Therefore, being eligible does not necessarily mean one will receive care. It is very likely one will be put on a waiting-list for assistance. Waivers have the same level of care and financial eligibility criteria as nursing home Medicaid. These limits are detailed above.
ABD Medicaid also provides in-home care and unlike HCBS Waivers, ABD Medicaid is an entitlement. Typically, ABD Medicaid has more restrictive financial eligibility criteria and less restrictive care need requirements (when compared to Waivers or Institutional Medicaid). ABD Medicaid eligibility criteria are state-specific. One can see that data for each state here.
Options When Over the Limits
When individuals or couples are over Medicaid’s income or asset limits, yet they still cannot afford to pay for the care they require, one should not give up hope. Medicaid offers different pathways to become eligible.
Medically Needy Pathway
Medically Needy Medicaid, currently available in 32 states and D.C., is a great option. The Medically Needy Pathway, in brief, considers the Medicaid candidate’s income AND their care costs. If Medicaid finds one’s care costs consumes the vast majority of one’s income, then Medicaid will allow the individual to become eligible regardless of how high their income is. The table below shows by how much one’s income can exceed their care costs on a monthly basis in 2019.
Example – John lives in California and has $4,500 in monthly income. He requires 40 hours of home care each week at $25 per hour, therefore his monthly cost of care is $4,000 (4 weeks x 40 hours x $25 = $4,000). After paying for his home care, John has $500 left in income each month which is under California’s Medically Needy Income Limit of $634.91. Therefore, John would be eligible for California Medicaid (Medi-Cal) through the Medically Needy Pathway.
|2019 Medically Needy Income Limits for Medicaid Eligibility|
|State||Medically Needy Income Limit|
|District of Columbia||$666.13|
Medicaid Planning is a strategy by which persons whose income or assets exceed Medicaid’s limits can become Medicaid eligible. They do so by working with a Medicaid expert who can re-structure their finances to help them become eligible. We’ve written extensively about the Pros and Cons of Medicaid Planning and the Different Types of Medicaid Planners. One should also consider reading the New York Times piece of Is Medicaid Planning Ethical?