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

Last updated: February 01, 2021

 

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, adult foster care, 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, adult foster 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 might immediately meet all the criteria for long term care from a Kentucky Medicaid program. Alternatively, persons might take the Medicaid Eligibility Test. IMPORTANT: If one does not meet all the requirements below, it does not mean that one is not eligible or cannot become eligible for Medicaid in Kentucky. More.

2021 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 $2,382 / month* $2,000 Nursing Home $4,764 / month* $4,000 Nursing Home $2,382 / month for applicant* $2,000 for applicant & $130,380 for non-applicant Nursing Home
Medicaid Waivers / Home and Community Based Services $2,382 / month $2,000 Nursing Home $4,764 / month* $4,000 Nursing Home $2,382 / month for applicant $2,000 for applicant & $130,380 for non-applicant Nursing Home
Regular Medicaid / Aged Blind and Disabled $235 / month** $2,000 None $291 / month** $4,000 None $291 / month** $4,000 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. An exception does exist for Covid-19 stimulus checks, which Medicaid does not count as income, and therefore, they do not impact eligibility.

When only one spouse of a married couple is applying for nursing home Medicaid or a Medicaid waiver, only the income of the applicant is counted. Said another way, the income of the non-applicant spouse is disregarded. However, in the case where just one spouse of a married couple is applying for regular Medicaid, the income of the non-applicant spouse is considered towards the applicant spouse’s income eligibility.

For non-applicant spouses of nursing home Medicaid applicants or HCBS waiver applicants, a Minimum Monthly Maintenance Needs Allowance (MMMNA) might be applicable. The MMMNA is the minimum amount of monthly income to which the non-applicant spouse is entitled. From July 2020 – June 2021, this amount is $2,155.00 / month. However, in certain circumstances, a non-applicant spouse may be entitled to as much as $3,260.00 / month. (This figure is effective January 2021 – December 2021). This spousal impoverishment 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. To be clear, this rule is not relevant for married couples with one spouse applying for Regular Medicaid. Learn more about how Medicaid counts income here.

*Please note from the chart above that the income limit for Medicaid nursing home care is $2,382 / month (in 2021). However, all of a beneficiary’s monthly income, minus a personal needs allowance of $40 / month, and possibly a monthly maintenance needs allowance for a non-applicant spouse, must go towards the cost of nursing home care.

**Notice also from the chart above, the income limit for Regular Medicaid / Aged Blind and Disabled (ABD) is quite low. However, those that receive SSI are automatically eligible for ABD Medicaid. As of 2021, this means a single applicant can have income up to $794 / month, and a married couple, up to $1,191 / month. The asset limit remains $2,000 for a single applicant, but is $3,000 for a couple. For those that do not receive SSI, there is a “spend down” program that allows one to spend income over the ABD 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, IRAs, and one’s primary home, given the Medicaid applicant resides in it or has expressed an intent to return to it, and his / her equity interest in the home is not more than $603,000 (in 2021). (Equity interest is the value of the home of which the Medicaid applicant owns). If a non-applicant spouse lives in the home, it is exempt regardless of where the applicant lives or the applicant’s equity interest in the home.

For married couples, as of 2021, the community spouse (the non-applicant spouse of a nursing home Medicaid applicant or a Medicaid waiver applicant) can retain half of the couple’s joint assets, up to a maximum of $130,380, as the chart indicates above. That said, there is also minimum resource standard, which is $26,076, and allows non-applicant spouses to retain 100% of the couple’s joint assets, up to this figure. This, in Medicaid speak, is known as the Community Spouse Resource Allowance (CSRA). As with the income allowance, the resource allowance does not pertain to married couples with one spouse applying for regular Medicaid.

One should be aware that Kentucky has a Medicaid Look-Back Period. This is a period of 60 months (5 years) that immediately precedes the date of one’s Medicaid application. During this time frame, Medicaid checks all 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 penalty period of Medicaid ineligibility will result.

 To be eligible for long-term care Medicaid, an applicant must also have a functional need for such care. For nursing home Medicaid and many HCBS Medicaid waivers, a nursing home level of care is required. Furthermore, for some program benefits, additional eligibility criteria may be required. As an example, for respite care, an inability to be left unsupervised might be necessary. 

 

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, 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 requirement for Medicaid eligibility, but not the asset requirement, the above courses of action cannot assist one in reducing their countable assets for eligibility purposes.

However, one can “spend down” assets by spending excess assets on non-countable ones, such as home modifications (i.e., addition of wheelchair ramps, stair lifts, and walk-in showers), prepaying funeral and burial expenses, and paying off debt.

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, as well as to protect their home from Medicaid’s estate recovery program. Read more or connect with a Medicaid planner.

 

Specific Kentucky Medicaid Programs

1) Kentucky Waiver for the Aged – This Home and Community Based (HCB) Waiver provides a variety of benefits, such as personal care assistance, adult day care, respite 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 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.

 

How to Apply for Kentucky Medicaid

Senior Kentucky residents can apply for Medicaid in person at their local Department for Community Based Services (DCBS) office. To locate the office nearest you, click here. Persons can also call the Kentucky Cabinet for Health and Family Services (CHFS) at 1-855-306-8959 for Medicaid related questions or for help with the Medicaid application process. There is also the option of applying online at benefind.

Prior to completing a Medicaid application, it is very important that Kentucky applicants are confident they meet all of the eligibility criteria discussed above. For seniors who don’t meet the requirements, or are unsure, it is recommended they participate in Medicaid planning. Applying for long-term care Medicaid can be a lengthy process that is stressful and complicated. For more information about applying for Medicaid, click here.

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