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

Last updated: May 22, 2018

Kentucky Medicaid Definition

In Kentucky, the Kentucky Cabinet for Health and Family Services’ Department for Medicaid Services is the agency that administers the state’s Medicaid program.

Medicaid is a wide-ranging, jointly funded state and federal health care program for low-income individuals of all ages. However, the focus of this page is strictly on Medicaid eligibility for elderly Kentucky residents, aged 65 and over, 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 Kentucky seniors may be eligible. These programs have slightly different financial and medical eligibility requirements, as well as benefits. Further complicating eligibility are the facts that the criteria vary with marital status and that Kentucky offers several pathways towards eligibility.

1) Institutional / Nursing Home Medicaid – is an entitlement (anyone who is eligible will receive assistance) & is provided only in nursing home facilities.
2) Medicaid Waivers / Home and Community Based Services (HCBS) – Limited number of participants, which means wait lists may exist. Provided at home, adult day care, or in assisted living.
3) Regular Medicaid / Aged Blind and Disabled – is an entitlement (anyone who meets the requirements is able to receive benefits) and is provided at home or adult day care.

The table below provides a quick reference to allow seniors to determine if they are immediately eligible for long term care from a Kentucky Medicaid program. Alternatively, take the Medicaid Eligibility TestIMPORTANT: If one does not meet all the requirements below, it does not mean that one is not eligible or cannot become eligible for Medicaid. More.

2018 Kentucky 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 $2,250 / month $2,000 Nursing Home $4,500 / month $4,000 Nursing Home $2,250 / month for applicant $2,000 for applicant & $123,600 for non-applicant Nursing Home
Medicaid Waivers / Home and Community Based Services $2,250 / month $2,000 Nursing Home $4,500 / month $4,000 Nursing Home $2,250 / month for applicant $2,000 for applicant & $123,600 for non-applicant Nursing Home
Regular Medicaid / Aged Blind and Disabled $235 / month $2,000 None $291/ month $4,000 None $235 / month $2,000 None
What Defines “Income”

For Medicaid eligibility purposes, any income that a Medicaid applicant receives is counted. To clarify, this income can come from any source. Examples include cash from family and friends, Veteran’s benefits, employment wages, alimony payments, pension payments, Social Security Disability Income, Social Security Income, IRA withdrawals, and stock dividends. However, when only one spouse of a married couple is applying for Medicaid, only the income of the applicant is counted. Said another way, the income of the non-applicant spouse is disregarded. There is also a Minimum Monthly Maintenance Needs Allowance (MMMNA), which is the minimum amount of monthly income to which the non-applicant spouse is entitled. (As of July 2018, this figure falls between $2,057.50 / month and $3,090 / month). This rule allows the Medicaid applicant to transfer income to the non-applicant spouse to ensure he or she has sufficient funds with which to live. In addition, this transfer of income is effective in lowering the applicant’s countable income for eligibility purposes.

Notice from the chart above, the income limit for Regular Medicaid / Aged Blind and Disabled is quite low. However, those that receive SSI are automatically eligible for ABD Medicaid. For those that do not receive SSI, there is a “spend down” program that allows one to spend income over the eligibility limit on medical expenses to qualify for Medicaid. Learn more below under “Qualifying When Over the Limits.”

 

What Defines “Assets”

Countable assets are assets that can easily be converted to cash to help cover the cost of long-term care and include the following: Cash, stocks, bonds, investments, credit union, savings, and checking accounts, pension funds, and real estate in which one does not reside. However, for Medicaid eligibility, there are many assets that are considered exempt (non-countable). Exemptions include personal belongings, household furnishings, an automobile, irrevocable burial trusts, and one’s primary home, given the Medicaid applicant or their spouse lives in the home and the home is valued under $572,000 (in 2018). For married couples, as of 2018, the community spouse (the non-applicant spouse) can retain up to a maximum of $123,600 of the couple’s joint assets, as the chart indicates above. This, in Medicaid speak, is known as the Community Spouse Resource Allowance (CSRA).

One should be aware that Kentucky has a Medicaid Look-Back Period. This is a period of 60 months (5 years) that dates back from the date of one’s Medicaid application. During this time frame, Medicaid checks all past asset transfers to ensure no assets were sold or given away under fair market value. This is done so one does not simply give away assets in order to meet Medicaid’s asset limit. If one is found to be in violation of the look-back period, a period of Medicaid ineligibility will result.

 

Qualifying When Over the Limits

1) Medically Needy Pathway – In Kentucky, there is a Spend Down Program that is specifically intended for those that are categorically aged, blind or disabled that have income over the Medicaid limit. In a nutshell, one may still be eligible for Medicaid services even if they are over the income limit by paying their excess income (the income over the Medicaid income limit) on medical bills. Once one has met their “spend-down” for the quarter (paid their excess income down to the income limit), one will receive Medicaid benefits for the remainder of the spend-down period.

2) Qualified Income Trusts (QIT’s) – QIT’s, which are also called Miller Trusts offer a way for individuals over the Medicaid income limit to still qualify for nursing home Medicaid or a Medicaid waiver. This is because money deposited into a QIT is not considered income when it comes to Medicaid eligibility. In very simple terms, income over the Medicaid income limit is deposited into a trust, and a trustee is named, giving that individual legal control of the money. The QIT must be irreversible, meaning once it has been created, it cannot be changed or canceled. The money in the account can only be used for very specific purposes, such as paying medical expenses accrued by the Medicaid enrollee.

Make note, the Spend Down Program and Qualified Income Trust options do not assist one in spending down extra assets for Medicaid qualification. Said another way, if one meets the income requirements for Medicaid eligibility, but not the asset requirement, the above courses of action cannot assist one in “spending down” extra assets.

However, one can “spend down” assets by spending excess assets on non-countable assets, such as home modifications, like the addition of wheelchair ramps, stair lifts, and walk-in showers, prepaying funeral and burial expenses, and paying off debt. As mentioned above, when spending down assets, it’s important that one does not give away assets or sell them way under market value. Doing so can result in a penalty period of Medicaid ineligibility.

3) Medicaid Planning – the majority of persons considering Medicaid are “over-income” or “over-asset” or both, but still cannot afford their cost of care.  For seniors in this situation, Medicaid planning exists. By working with a Medicaid planning professional, families can employ a variety of strategies to help them become Medicaid eligible. Read more or connect with a Medicaid planner.

 

Specific Kentucky Medicaid Programs

1) Kentucky Waiver for the Aged – Provides a variety of benefits, such as personal care assistance, adult day care, and meal delivery, to enable seniors to continue to live in their homes, rather than need to be placed in nursing homes. Program participants are able to hire the caregiver of their choosing, including some family members.

2) Kentucky Supports for Community Living Waiver (SCL) – Intended for individuals with developmental or intellectual disabilities that manifested before the age of 22. Currently, there is a waitlist for services, which includes home modifications, adult foster care, personal care, and more.

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