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

Last updated: December 06, 2021

 

Colorado Medicaid Definition

In Colorado, Medicaid is called Health First Colorado and is administered by the Colorado Department of Health Care Policy & Financing.

Medicaid is a wide-ranging health care insurance program for low-income individuals of all ages. Jointly funded by the state and federal government, it provides health coverage for diverse groups of Colorado residents, including pregnant women, parents with dependent children, adults with no dependent children, disabled individuals, and seniors.

This page is focused on Medicaid eligibility for Colorado seniors, and specifically for long term care, whether that be at home, in a nursing home, or in an assisted living facility.

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

 

Income & Asset Limits for Eligibility

There are several different Medicaid long-term care programs for which Colorado seniors may be eligible. These programs have varying financial and medical (functional) eligibility requirements, as well as benefits. Further complicating eligibility are the facts that the requirements vary with marital status and that CO offers multiple pathways towards Medicaid eligibility.

1) Institutional / Nursing Home Medicaid – This is an entitlement program; Anyone who meets the requirements will receive assistance. Benefits are only provided in nursing home facilities.

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

3) Regular Medicaid / Aged Blind and Disabled (ABD) – This is an entitlement program; 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.

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

2022 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 $2,523 / month* $2,000 Nursing Home $5,046 / month* $3,000 in separate rooms / $4,000 in shared room Nursing Home $2,523 / month for applicant* $2,000 for applicant & $137,400 for non-applicant Nursing Home
Medicaid Waivers / Home and Community Based Services $2,523 / month $2,000 Nursing Home $5,046 / month $3,000 Nursing Home $5,046 / month for applicant $2,000 for applicant & $137,400 for non-applicant Nursing Home
Regular Medicaid / Aged Blind and Disabled $841 / month $2,000 Help with ADLs $1,261 / month $3,000 Help with ADLs $1,261 / month $3,000 Help with ADLs
*A nursing home Medicaid beneficiary cannot retain monthly income up to this amount. All of one’s monthly income, with the exception of a personal needs allowance of $91.35 / month, Medicare premiums, and a monthly maintenance needs allowance for a non-applicant spouse (if applicable), must be paid to the nursing home.

 

What Defines “Income”

Any income that a Medicaid applicant receives is counted. This can come from any source and includes employment wages, alimony payments, pension payments, Social Security Disability Income (SSDI), Veteran’s benefits, railroad retirement annuities, Social Security Income (SSI), IRA withdrawals, and stock dividends Holocaust restitution payments and Covid-19 stimulus checks are not considered income and do not impact Medicaid eligibility.

When only one spouse of a married couple is applying for nursing home Medicaid or a Waiver, only the applicant’s income is counted towards Medicaid’s income limit. This means the income of the non-applicant spouse is not considered and does not impact the income-eligibility of the applicant spouse. However, 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. The MMMNA is $2,177.50 (effective 7/1/21 – 6/30/22). If a non-applicant’s monthly income is under $2,177.50, income can be transferred 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 $653.25 / month (effective 7/1/21 – 6/30/22). However, in no case can a spousal income allowance put a non-applicant’s monthly income over $3,435. This is the Maximum Monthly Maintenance Needs Allowance for 2022. Learn more about calculating the spousal income allowance.

The MMMNA not only prevents a non-applicant spouse from becoming impoverished, it also effectively lowers an applicant’s countable income.

Income is calculated differently for married couples with one spouse applying for regular Medicaid. In this case, the income of both spouses is calculated towards the applicant spouse’s eligibility. To learn more about how Medicaid counts income, click here.

 

What Defines “Assets”

Countable assets include cash, stocks, bonds, investments, credit union, savings, and checking accounts, and real estate in which one does not reside. Some assets are exempt from Medicaid’s asset limit, which means they do not count. Exemptions include personal belongings, household furnishings, an automobile, irrevocable burial trusts, and generally one’s primary home. For the home to be exempt, the Medicaid applicant must live in it or have “intent to return”, and in 2022, have a home equity interest no greater than $636,000. Equity interest is the value of the home, minus any outstanding debt, in which the Medicaid applicant owns. If a non-applicant spouse lives in the home, it is exempt regardless of where the applicant lives or their home equity interest. Furthermore, for seniors applying for regular Medicaid, there is no home equity limit.

 While one’s home is generally exempt from Medicaid’s asset limit, it is not safe from Medicaid’s estate recovery program. Following a CO long-term care Medicaid beneficiary’s death, the state Medicaid agency attempts reimbursement of care costs through whatever estate of the deceased 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.

All assets of a married couple are considered jointly owned regardless of the long-term care Medicaid program for which one is applying. However, the non-applicant spouse of a nursing home Medicaid or HCBS Medicaid Waiver applicant is permitted a Community Spouse Resource Allowance (CSRA). In 2022, the community spouse (the non-applicant spouse) can retain up to $137,400 of the couple’s joint assets, as shown in the chart above.

It’s vital that one does not give away assets or sell them for less than fair market value during the 60-months (5 years) immediately preceding one’s Medicaid application. This is because Colorado has a Medicaid Look-Back Period in which Medicaid checks all past asset transfers to ensure none were transferred for less than their worth. If they were, it is assumed it was done to meet Medicaid’s asset limit. Violating the look-back period results in a penalty period of Medicaid ineligibility.

 Non-Financial Eligibility Requirements – For Colorado Medicaid long-term care, an applicant must have a functional need for assistance. For nursing home Medicaid and HCBS Medicaid Waivers, a nursing facility level of care (NFLOC) is required. Furthermore, there may be additional eligibility requirements for some program benefits. For example, meeting eligibility requirements for a Waiver that offers home modifications as a program benefit does not mean the individual will automatically be able to modify their home. Rather, an inability to safely live independently without home modifications might be required. 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

For Colorado elderly residents (65 and over), who do not meet the eligibility requirements in the table above, there are other ways to qualify for Medicaid.

1) Qualified Income Trusts (QIT’s) – Also called Miller Trusts, QIT’s offer a way for elderly CO residents who are over Medicaid’s income limit to still qualify for nursing home Medicaid or a Medicaid Waiver. Specifically called Income Trusts in Colorado, monthly income put into this type of irrevocable trust no longer counts as income. Irrevocable means the terms of the trust cannot be altered or canceled. In basic terms, 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 reduce their countable assets by spending down extra assets. This can be done by spending “excess” 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.

3) Medicaid Planning – The majority of persons considering Medicaid are “over-income” or “over-asset” or both, but they still cannot afford their cost of 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 programRead more or connect with a Medicaid planner.

 

Specific Colorado Medicaid Programs

1) Elderly, Blind and Disabled (EBD) Waiver – Provides services to disabled individuals and seniors 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 options via this program to self-direct one’s 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.

 

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. Contact information is available here. Persons can also call the Colorado Department of Human Services at 1-800-221-3943. Another option is to apply online via the Health First Colorado website. Finally, one’s local Single Entry Point Agency can provide assistance with applying for Medicaid.

To learn more about Medicaid’s application process, click here.

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