Colorado Medicaid Eligibility for Long Term Care: Income & Asset Limits

Last updated: January 02, 2024

 

Colorado Medicaid Long-Term Care Definition

Medicaid is a health care insurance program for low-income individuals of all ages. While this program provides health coverage for diverse groups of Colorado residents, this page is focused on long-term care Medicaid eligibility for CO seniors. In addition to care services in nursing home facilities and assisted living residences, services and supports are available to help the elderly remain living in their homes. There are three categories of Medicaid long-term care programs for which Colorado seniors may be eligible.

1) Institutional / Nursing Home Medicaid – An entitlement; anyone who meets the eligibility requirements will receive assistance. Benefits are provided only in nursing home facilities.

2) Medicaid Waivers / Home and Community Based Services (HCBS) – Not an entitlement; the number of participants is limited and wait lists may exist. Benefits are intended to prevent and delay nursing home admissions and may be provided at home, adult day care, or in assisted living.

3) Regular Medicaid / Aged Blind and Disabled (ABD) – An entitlement; if eligibility criteria is met, assistance is received. Various long-term care benefits, such as personal care assistance or adult day care, may be available.

In Colorado, Medicaid is called Health First Colorado. While this program is jointly funded by the state and federal government, it is administered by the state under parameters set by the federal government. The Colorado Department of Health Care Policy & Financing is the administering agency.

  The American Council on Aging now offers a free, quick and easy Medicaid Eligibility Test for seniors.

 

Income & Asset Limits for Eligibility

Each of the three Medicaid long-term care programs have varying financial and medical eligibility criteria. Financial requirements change annually, vary based on marital status, and is further complicated by the fact that Colorado offers alternative pathways towards eligibility.

 Simplified Eligibility Criteria: Single Nursing Home Applicant
CO seniors must have limited income and assets, and a medical need to qualify for Medicaid long-term care. In 2024, a single Nursing Home Medicaid applicant must meet the following criteria: 1) Income under $2,829 / month 2) Assets under $2,000 3) Require a Nursing Home Level of Care.

The table below provides a quick reference to allow seniors to determine if they might be immediately eligible for a Colorado Medicaid long-term care program.Alternatively, one can take the Medicaid Eligibility TestIMPORTANT: Not meeting all the requirements does not mean one is ineligible or cannot become eligible for Medicaid. More.

2024 Colorado Medicaid Long-Term Care Eligibility for Seniors
Type of Medicaid Single Married (both spouses applying) Married (one spouse applying)
Income Limit Asset Limit Level of Care Required Income Limit Asset Limit Level of Care Required Income Limit Asset Limit Level of Care Required
Institutional / Nursing Home Medicaid $2,829 / month* $2,000 Nursing Home $5,658 / month* $3,000 in separate rooms / $4,000 in shared room Nursing Home $2,829 / month for applicant* $2,000 for applicant & $154,140 for non-applicant Nursing Home
Medicaid Waivers / Home and Community Based Services $2,829 / month† $2,000 Nursing Home $5,658 / month† $3,000 Nursing Home $2,829 / month for applicant† $2,000 for applicant & $154,140 for non-applicant Nursing Home
Regular Medicaid / Aged Blind and Disabled $943 / month $2,000 Help with ADLs $1,415 / month $3,000 Help with ADLs $1,415 / month $3,000 Help with ADLs
*All of a beneficiary’s monthly income, with the exception of a Personal Needs Allowance of $105.56 / month, Medicare premiums, and a Needs Allowance for a non-applicant spouse (if applicable), must be paid to the nursing home. This is called a Patient Liability.
†Based on one’s living setting, a program beneficiary may not be able keep monthly income up to this level.

 

Income Definition & Exceptions

Countable vs. Non-Countable Income
Nearly all income that a Medicaid applicant receives is counted towards the income limit. This includes employment wages, alimony payments, pension payments, Social Security Disability Income (SSDI), railroad retirement annuities, Social Security Income (SSI), IRA withdrawals, and stock dividends. Nationally, Holocaust restitution payments are not counted as income. Furthermore, in CO, the VA Aid and Attendance, which is above and beyond the Basic VA Pension, does 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 applicant’s income is counted towards Medicaid’s income limit. Furthermore, the non-applicant spouse may be entitled to a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their applicant spouse. The MMMNA is the minimum amount of income a non-applicant spouse is said to require to avoid spousal impoverishment.

Effective 7/1/23 – 6/30/24, the MMMNA in CO is $2,465. If a non-applicant’s monthly income falls under $2,465, income can be transferred to them from their applicant spouse to bring their income up to this level. In Colorado, a non-applicant spouse can further increase their Spousal Income Allowance if their housing and utility costs exceed a “shelter standard” of $739.50 / month (eff. 7/1/23 – 6/30/24). However, in 2024, a Spousal Income Allowance cannot push a non-applicant’s monthly income over $3,853.50. This is the Maximum Monthly Maintenance Needs Allowance. Learn more about calculating this allowance.

The Monthly Maintenance Needs Allowance not only prevents a non-applicant spouse from becoming impoverished, it also effectively lowers an applicant’s countable income for eligibility purposes.

Income is counted differently when only one spouse applies for Regular Medicaid. The income of both the applicant and non-applicant spouse is calculated towards the applicant’s income eligibility and there is no Monthly Maintenance Needs Allowance. More on how Medicaid counts income.

 

Asset Definition & Exceptions

Countable vs. Non-Countable Assets
Countable assets are calculated towards Medicaid’s asset limit. These non-exempt assets include cash, stocks, bonds, investments, bank accounts (credit union, savings, and checking), and real estate in which on does not reside. In Colorado, IRA’s and 401K’s are also counted. There are other assets that are non-countable; they are exempt from Medicaid’s asset limit. Exemptions include personal belongings, household furnishings, an automobile, irrevocable burial trusts, and generally one’s primary home.

Treatment of Assets for a Couple
All assets of a married couple are considered jointly owned. This is true despite the long-term care Medicaid program for which one is applying and regardless of if one or both spouses are applicants. There is, however, a Community Spouse Resource Allowance (CSRA) that protects a larger amount of a couple’s countable assets for the non-applicant spouse of a Nursing Home Medicaid or Medicaid Waiver applicant. In 2024, the community spouse (non-applicant spouse) can keep up to $154,140 of the couple’s countable assets. There is no CSRA for Regular Medicaid.

Medicaid’s Look-Back Rule
Colorado has a 60-month Medicaid Look-Back Period for Nursing Home Medicaid and Medicaid Waivers that immediately precedes one’s date of application. During the “look-back”, Medicaid checks all asset transfers to ensure none were sold or gifted under fair market value. This includes asset transfers made by one’s spouse. The Look-Back Rule is meant to discourage persons from gifting assets in order to meet Medicaid’s asset limit. Persons who violate this rule are penalized with a Penalty Period of Medicaid ineligibility. The Look-Back Rule does not apply to Regular Medicaid applicants.

The U.S. Federal Gift Tax Rule does not extend to Medicaid eligibility. In 2024, the Gift Tax 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.

 

Colorado Medicaid Home Exemption Rules

For home exemption, the Medicaid applicant or their spouse must live in the home. If there is no spouse in the home, there is a home equity interest limit of $1,071,000 (in 2024). Home equity is the value of the home, minus any outstanding debt against it. Equity interest is the amount of the home’s equity that is owned by the applicant. Furthermore, if there is no spouse in the home and the applicant does not live there, the applicant must have Intent to Return. There is no home equity interest limit for persons applying for Regular Medicaid. Other exemptions exist.

While one’s home is generally not counted towards Medicaid’s asset limit, it is not exempt from Medicaid’s Estate Recovery Program (MERP). After a CO long-term care Medicaid beneficiary’s death, the state 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 medical need for Medicaid long-term care. For Nursing Home Medicaid and Medicaid Waivers, a Nursing Facility Level of Care (NFLOC) is required. Furthermore, there may be additional eligibility requirements for some program benefits. As an example, for a Medicaid Waiver to cover the cost of home modifications, it may be required that one cannot safely live independently without modifications. For long-term care services via the Regular Medicaid program, a functional need with the Activities of Daily Living is required, but a NFLOC is not necessarily required.

 

Qualifying When Over the Limits

Elderly Colorado residents (65+ years old) who do not meet the eligibility requirements above may still be able to qualify for Medicaid long-term care.

1) Qualified Income Trusts (QIT’s) – Called Income Trusts in Colorado, these trusts allow Nursing Home Medicaid and Medicaid Waiver applicants with income over Medicaid’s limit to become income-eligible. This is because Medicaid no longer counts income put into irrevocable Income Trusts towards the income limit. Irrevocable means the terms of the trust cannot be altered or canceled. Essentially, one’s “excess” income is directly deposited into the trust, in which a trustee is named, giving that individual legal control of the money. CO allows the Medicaid applicant to be the trustee, given a successor trustee is named. The trust funds can only be used for very specific purposes, such as contributing towards the cost of nursing home care, HCBS long-term care, and medical expenses accrued by the Medicaid enrollee. Upon the death of the Medicaid participant or in the event of Medicaid disenrollment, the remainder of the funds must be paid to the Colorado Department of Health Care.

2) Asset Spend-Down – Persons who have countable assets over CO Medicaid’s asset limit can become asset-eligible by “spending down” excess assets. This can be done by spending countable assets on non-countable ones, such as home improvements (replacing a leaky roof, updating the heating/plumbing), home modifications (wheelchair ramps, roll-in showers, and stair lifts), vehicle modifications (wheelchair lifts, adaptive control devices, and floor modifications to allow one to drive from a wheelchair), prepaying funeral and burial expenses, and paying off debt. Remember that assets cannot be gifted or sold under fair market value, as it violates Medicaid’s Look- Back Rule. When “spending down”, it is best to keep documentation of how the assets were spent as evidence the Look-Back Period was not violated.

 Our Spend Down Calculator can assist persons in determining if they might have a spend down, and if so, provide an estimate of the amount.

3) Medicaid Planning – The majority of persons considering Medicaid are “over-income” and / or “over-asset”, but they still cannot afford their cost of long-term care. For these individuals, 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 Colorado Medicaid Programs

1) Elderly, Blind and Disabled (EBD) Waiver – Provides services to seniors and individuals who are disabled or blind living at home and in assisted living facilities to promote independent living and prevent premature nursing home placements. Assistance may include adult day care, personal care assistance, home modifications, personal emergency response systems, and more. There are two available options for one to self-direct their own care, both of which allow a program participant to hire the caregiver of their choice. These options are Consumer-Directed Attendant Support Services (CDASS) and In-Home Support Services (IHSS).

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

 

How to Apply for Colorado Medicaid

For additional information about Colorado’s Medicaid programs, or to apply, one should contact their county Department of Human Services’ office. Persons can also call the Colorado Department of Human Services at 1-800-221-3943 or apply online via the Health First Colorado website. One’s local Single Entry Point Agency can provide assistance with applying for Medicaid. The application process may vary based on the program for which one is applying.

Colorado Medicaid applicants should be certain that all eligibility requirements are met prior to applying for benefits. For seniors who have income and / or asset(s) greater than the allowable amounts, Medicaid planning can be invaluable. Furthermore, the application process is complicated and assistance with the process may be welcomed. Familiarizing oneself with general information about the application process for long-term care Medicaid can be helpful.

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