New Jersey Medicaid Income & Asset Limits for Nursing Homes & In-Home Long Term Care

Last updated: February 02, 2022

 

New Jersey Medicaid Definition

Medicaid is a jointly funded state and federal health care program for individuals with limited financial means. While this program is intended to assist individuals of all ages, the focus of this page is strictly on Medicaid eligibility for New Jersey elderly residents who are 65 years of age and older. Specifically, long-term care Medicaid is covered. In addition to care services in nursing homes, adult foster care homes, comprehensive personal care homes, and assisted living facilities, NJ Medicaid pays for non-medical services and supports to help frail seniors remain living in their homes.

In New Jersey, Medicaid for the elderly is also called NJ FamilyCare Aged, Blind, Disabled (ABD) Programs. The New Jersey Department of Human Services, Division of Medical Assistance and Health Services administers these programs.

  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 Medicaid long-term care programs for which New Jersey seniors may be eligible. These programs have varying functional and financial eligibility requirements, as well as program benefits. Further complicating eligibility are the facts that the criteria vary with marital status and that New Jersey offers several pathways towards Medicaid eligibility.

1) Institutional / Nursing Home Medicaid – This is an entitlement program; Anyone who is eligible will receive assistance. Benefits are provided only in nursing homes.

2) Home and Community Based Services (HCBS) – Although New Jersey previously offered HCBS Medicaid Waivers for the aged, the state no longer does. With these Waivers, the number of participant slots was limited and wait lists for services could exist. Currently, long term care services are provided at home, adult day care, adult foster care homes, comprehensive personal care homes, and assisted living residences via a managed care system. Unlike with HCBS Waivers, the managed care program does not have enrollment caps, which means there is no waiting list to receive long-term care benefits. More on managed care.

3) Regular Medicaid / Aged Blind and Disabled – This is an entitlement program; Persons who meet the eligibility requirements will receive services. Limited long-term care services, such as personal care assistance or adult day care, may be available.

The table below provides a quick reference to allow seniors to determine if they might be immediately eligible for long term care from a New Jersey Medicaid program. Alternatively, one can take the Medicaid Eligibility Test. IMPORTANT: Not meeting all of the criteria does not mean one is ineligible or cannot become eligible for Medicaid in NJ. More.

2022 New Jersey 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 Nursing Home $2,523 / month for applicant* $2,000 for applicant & $137,400 for non-applicant Nursing Home
Home and Community Based Services $2,523 / month† $2,000 Nursing Home $5,046 / month† $3,000 Nursing Home $2,523 / month for applicant† $2,000 for applicant & $137,400 for non-applicant Nursing Home
Regular Medicaid / Aged Blind and Disabled $1,133 / month $4,000 Help with ADLs $1,526 / month $6,000 Help with ADLs $1,526 / month $6,000 Help with ADLs
*All of a beneficiary’s monthly income, with the exception of a personal needs allowance of $50.00 / month, Medicare premiums, and potentially an income allowance for a non-applicant spouse, must go towards nursing home costs.
†Based on one’s living setting, a program beneficiary may not be able to keep monthly income up to this level.

 

What Defines “Income”

Any income that a Medicaid applicant receives is counted. This income can come from any source. Examples include employment wages, alimony payments, pension payments, Social Security Disability Income, Social Security Income, IRA withdrawals, and stock dividends. Holocaust restitution payments and Covid-19 stimulus checks are an exception and do not count as income.

When only one spouse of a married couple applies for nursing home Medicaid or Home and Community Based Services, only the income of the applicant is counted. This means the income of the non-applicant spouse does not impact the income eligibility of their spouse. The non-applicant spouse, however, may be entitled to a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their applicant spouse. The MMMNA is a spousal impoverishment rule and is the minimum amount of monthly income a non-applicant spouse is said to require to avoid spousal impoverishment. The MMMNA in NJ is $2,288.75 (effective 7/1/22 – 6/30/23). If a non-applicant’s monthly income falls under $2,288.75, income can be transferred from their applicant spouse, bringing their income up to this level.

In New Jersey, a non-applicant spouse can further increase their spousal income allowance if their housing and utility costs exceed a “shelter standard” of $686.63 / month (effective 7/1/22 – 6/30/23). In 2022, a spousal income allowance cannot put a non-applicant’s income over $3,435 / month. This is the Maximum Monthly Maintenance Needs Allowance. More on how the spousal allowance is calculated.

Income is counted differently when only one spouse applies for Regular Medicaid / Aged Blind and Disabled; The income of both the applicant spouse and non-applicant spouse is calculated towards the applicant’s income eligibility. For additional information on how Medicaid counts income, click here.

 

What Defines “Assets”

Countable assets include cash, stocks, bonds, investments, IRAs, credit union, savings, and checking accounts, and real estate in which one does not reside. There are also many assets that are considered exempt (non-countable). Exemptions include personal belongings, household furnishings, an automobile, irrevocable burial trusts, and generally one’s primary home. For home exemption, the Medicaid applicant must live in the home or have intent to return, and in 2022, their home equity interest must be no greater than $955,000. Equity interest is the amount of the home’s value owned by the applicant. The home is also exempt, regardless of any other circumstances, if the applicant has a spouse living in it.

 While one’s home is generally exempt from Medicaid’s asset limit, it is not exempt from Medicaid’s estate recovery program. Following a long-term care Medicaid beneficiary’s death, New Jersey’s 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.

All assets of a married couple are considered jointly owned regardless of the long-term care Medicaid program for which one is applying. However, there is a spousal impoverishment provision that permits the non-applicant spouse of a nursing home Medicaid or Home and Community Based Services applicant a Community Spouse Resource Allowance (CSRA). In 2022, the community spouse (the non-applicant spouse) can retain 50% of the couples’ assets, up to a maximum of $137,400, as the chart indicates above. If the non-applicant’s half of the assets falls under $27,480, 100% of the assets, up to $27,480 can be kept by the non-applicant.

New Jersey has a 5-year Medicaid Look-Back Period that immediately precedes one’s date of Medicaid application. During this period, Medicaid checks to ensure no assets were gifted or sold under fair market value. If this has been done, the Medicaid agency assumes it was meet Medicaid’s asset limit. Violating the look-back rule, even unintentionally, results in a period of Medicaid ineligibility.

 Non-Financial Eligibility Requirements – For New Jersey long-term care Medicaid eligibility, an applicant must have a functional need for sure care. For nursing home Medicaid and Home and Community Based Services, a nursing facility level of care (NFLOC) is required. Furthermore, some program benefits may require additional eligibility criteria be met. As an example, for home modifications, an inability to safely live at home without modifying the home might be necessary. 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 elderly New Jersey residents, 65 and over, who do not meet the eligibility requirements in the table above, there are other ways to qualify for Medicaid.

1) Medically Needy Pathway – New Jersey has a Medically Needy Program, also called the Special Medicaid Program, Medically Needy Segment, for persons applying for Regular Medicaid / Aged Blind and Disabled and have income over the Medicaid limit. This program, also commonly called a “Spend down” program, allows persons to become income-eligible for Medicaid services by “spending down” their income on medical bills and health insurance premiums. In 2022, the medically needy income limit in NJ is $367 for an individual and $434 for a couple. The “spend down” amount, which can be thought of as a deductible, is the difference between one’s monthly income and the medically needy income limit. In NJ, the “spend down” is calculated for a 6-month period. Once an individual (or couple) have met their “spend down”, they will be Medicaid eligible for the remainder of the period. The medically needy asset limit is $4,000 for an individual and $6,000 for a couple.

2) Qualified Income Trusts (QIT) – Also called Miller Trusts, QITs offer a way for persons over the Medicaid income limit to still qualify for nursing home Medicaid or Home and Community Based Services. In simplified terms, income over Medicaid’s income limit is deposited into an irreversible QIT and is not counted towards the income limit. Irreversible means once the trust has been established, it cannot be changed or canceled. A trustee is named to manage the trust, giving that person legal control of the trust funds, which can only be used for very specific purposes. This includes paying health insurance premiums and medical expenses accrued by the Medicaid beneficiary that are not covered by Medicaid. Furthermore, the state of New Jersey must be listed as the beneficiary upon the death of the Medicaid recipient.

3) Asset Spend Down – Persons who have assets over Medicaid’s asset limit can “spend down” extra assets to qualify for Medicaid. This can be done by spending countable assets on non-countable ones, such as home modifications (i.e., wheelchair ramps, roll in showers, stair lifts), prepaying funeral and burial expenses, and paying off debt. Remember, assets cannot be gifted or sold under fair market value, as doing so violates Medicaid’s look back rule. It is recommended one keep documentation of how assets were spent as proof the look back rule was not violated.

4) 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 persons, 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 New Jersey Medicaid Programs

New Jersey, like most states, pays for nursing home care. The state also recognizes that providing care for persons in their homes or community can be both less expensive than nursing home care and is preferable for the care recipients and their families. Therefore, the state also offers Medicaid programs that provide such assistance.

1) Managed Long Term Services & Supports (MLTSS) Program – Via this managed care program, seniors can receive nursing home care, as well as a variety of care services in their homes, adult family care homes, comprehensive personal care homes, or in assisted living residences. Potential benefits may include personal care, light housecleaning, adult day care, home modifications, respite care, and medical alert services.

2) Personal Preference Program (PPP) – Program participants are given a budget to manage their own long term care needs. Allowable expenses include assistive technologies, home modifications, and personal care. Most interestingly, personal care can be “self-directed” and beneficiaries can choose their own care providers. This includes the ability to hire family members, even spouses.

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

 

How to Apply for New Jersey Medicaid

New Jersey seniors can apply for FamilyCare Aged, Blind, Disabled Programs online at NJFamilyCare, complete a printed application and return it to one’s county welfare agency, or call 1-800-701-0710 to apply over the phone. Persons can contact their county welfare agency or local Area Agency on Aging office for program questions and application assistance

Applying for Medicaid in New Jersey isn’t always straightforward. This is partly because there are several programs relevant to aging seniors and partly because applicants must be certain they meet the eligibility criteria (discussed above) prior to submitting an application for benefits. Seniors who have income and / or assets greater than the allowable amount(s) should strongly consider Medicaid planning. This can make the difference between acceptance into a Medicaid program and denial of benefits. To learn more about the application process for long-term care Medicaid, click here.

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