South Dakota Medicaid Eligibility for Long Term Care: Income & Asset Limits

Last updated: November 22, 2023

 

South Dakota Medicaid Long-Term Care Definition

Medicaid is a health insurance program for low-income individuals of all ages. While there are various coverage groups, the focus of this page is Medicaid long-term care eligibility for South Dakota elders, aged 65 and over. In addition to care services in nursing homes, community living homes, structured family caregiving homes, and assisted living facilities, SD Medicaid pays for non-medical services and supports to help frail seniors remain living in their homes. There are three categories of Medicaid long-term care programs for which South Dakota seniors may be eligible.

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

2) Medicaid Waivers / Home and Community Based Services (HCBS) – Not an entitlement; the number of participant enrollment slots are limited and waiting lists may exist. Benefits are intended to delay the need for nursing home admissions and may be provided at home, adult day care, a community living home, a structured family caregiving home, or in assisted living. More on Waivers.

3) Regular Medicaid / Aged, Blind, and Disabled – An entitlement; all eligible applicants are able to receive services. Various long-term care services, such as personal care assistance or adult day care, may be available.

Medicaid is jointly funded by the state and federal government, but is administered by the state under federally set parameters. The administering agency in SD is the South Dakota Department of Social Services (DSS).

  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 categories of Medicaid long-term care programs have varying financial and medical (functional) eligibility requirements. Further complicating eligibility is that financial requirements change annually, vary with marital status, and that SD offers multiple pathways towards Medicaid eligibility.

 Simplified Eligibility Criteria: Single Nursing Home Applicant
South Dakota 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 long-term care from a South Dakota Medicaid program. Alternatively, persons can take the Medicaid Eligibility TestIMPORTANT: Not meeting all of the criteria does not mean one is ineligible or cannot become eligible for SD Medicaid. More.

2024 South Dakota 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 ($2,829 / month per spouse)* $3,000 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 ($2,829 / month per spouse)† $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 $60 / month, Medicare premiums, and potentially a Needs Allowance for a non-applicant spouse, 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, railroad retirement, pension payments, Social Security Disability Income, Social Security Income, Supplemental Security Income, inheritance, and stock dividends. Nationally, Holocaust restitution payments are not counted as income. Furthermore, in SD, the VA Aid & Attendance Pension, 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 income of the applicant is counted; the income of the non-applicant spouse is disregarded. Furthermore, the non-applicant spouse (also called a community 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.

In SD, the MMMNA is $2,465 (eff. 7/1/23 – 6/30/24). If a non-applicant’s monthly income is under $2,465, income can be transferred to them from their applicant spouse, bringing their income up to this level. 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 income over $3,853.50 / month. More on calculating the Spousal Income Allowance.

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

 

Asset Definition & Exceptions

Countable vs. Non-Countable Assets
Countable (non-exempt) assets are counted towards Medicaid’s asset limit. This includes cash, certificates of deposit, stocks, bonds, annuities, bank accounts (credit union, savings, checking), and real estate in which one does not reside. In South Dakota IRA’s / 401K’s, are also counted. There are also non-countable (exempt) assets for Medicaid eligibility purposes. Exemptions include personal belongings, such as clothing, household furnishings and appliances, an automobile, select prepaid funeral contracts, 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 regardless of 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 (community spouse) of a Nursing Home Medicaid or Medicaid Waiver applicant. In 2024, the CSRA allows the non-applicant spouse to keep 50% of the couples’ assets, up to a maximum of $154,140. If the non-applicant’s half of the assets is less than $30,828, 100% of the assets, up to $30,828 can be kept by the community spouse.

Medicaid’s Look-Back Rule
South Dakota has a 60-month (5 year) Medicaid Look-Back Period for Nursing Home Medicaid and Medicaid Waiver applicants that immediately precedes one’s date of Medicaid application. During this period, Medicaid checks all past asset transfers, including ones made by a non-applicant spouse, to ensure none were gifted or sold for under fair market value. This rule is to prevent Medicaid applicants from transferring assets to meet the asset limit. Violating the Look-Back Rule is cause for a Penalty Period of Medicaid ineligibility. This rule does not apply to Regular Medicaid.

The IRS Gift Tax Exemption does not extend to Medicaid eligibility. In 2024, this exemption allows one to gift up to $18,000 per recipient without filing a Gift Tax Return. Gifting under this rule violates Medicaid’s Look-Back Period.

 

South Dakota Medicaid Home Exemption Rules

For the home to be exempt, a Medicaid applicant or their spouse must live in it. If there is no spouse living in the home, there is a home equity interest limit of $713,000 (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 not a spouse in the home, and the Medicaid applicant does not live in it, the applicant must have Intent to Return. There is no home equity interest limit for Regular Medicaid. Other exemptions exist.

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, South Dakota’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.

 

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 Home Level of Care (NHLOC) is required. Furthermore, additional criteria may be required for some program benefits. For example, for home modifications, an inability to safely and independently live at home without modifying the home 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 NHLOC is not necessarily required.

 

Qualifying When Over the Limits

Elderly South Dakota residents (aged 65 and over) who do not meet the financial eligibility criteria above can still qualify for long-term care Medicaid.

1) Qualified Income Trusts (QIT’s) – Also called Miller Trusts, or specifically Medicaid Income Trusts in South Dakota, QIT’s are special trusts that allow Nursing Home Medicaid and Medicaid Waiver applicants who are over the income limit to become income-eligible. For Medicaid eligibility purposes, monthly income put into a QIT no longer counts as income. Essentially, one’s “excess” income is directly deposited into the irrevocable trust, in which a trustee is named, giving that individual legal control of the money. Irrevocable means that once the trust has been established, it cannot be changed or canceled. The funds in the trust can only be used for very specific purposes, such as paying long-term care services / medical expenses accrued by the Medicaid enrollee, and, if applicable, the Medicaid enrollee’s Personal Needs Allowance and an income allowance for a community spouse. The South Dakota Department of Social Services must be listed as the remainder beneficiary.

2) Asset Spend Down – Persons who have assets over SD’s limit can “spend down” extra assets and become asset-eligible. This can be done by spending countable assets on non-countable ones. Examples include home modifications and additions (wheelchair ramps, roll-in showers, stair lifts, and adding first floor bedrooms), home improvements (replacing faulty electrical wiring, updating plumbing, and replacing old water heaters), 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, assets cannot be gifted or sold under fair market value. Doing so violates the Look-Back Rule. It is recommended one keep documentation of how assets were spent as proof this rule 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 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 Estate Recovery.  Connect with a Medicaid Planner.

 

Specific South Dakota Medicaid Programs

In addition to paying for nursing home care, South Dakota Medicaid offers the following programs relevant to the elderly that helps them to live at home or in the community.

1) Personal Care Services (PCS) – Part of the Regular Medicaid plan, this program is intended to prevent unnecessary nursing home placements by providing personal care in the homes of eligible applicants. Benefits include help with bathing and grooming, dressing and undressing, eating, mobility, shopping for essentials, light housework, and meal preparation.

2) HOPE (Home and Community-Based Options and Person Centered Excellence) Waiver

Previously called the HCBS Waiver for the Elderly, this is a nursing home diversion program and provides benefits in one’s home, a community living home, a structured family caregiving home, or an assisted living facility. Available benefits may include adult day care, private duty nursing, homemaker services, personal care assistance, home modifications, emergency response systems, and more.

3) Money Follows the Person (MFP) –This federal program helps institutionalized persons who are eligible for Medicaid to transition back home or into the community.

 

How to Apply for South Dakota Medicaid

South Dakota seniors can download an “Application Form for Long Term Care Related Programs” from the bottom of this webpage and return it completed to their local DSS office. Seniors can also call 877-999-5612 to request a mailed application, ask Medicaid related questions, or request application assistance. Alternatively, seniors can apply online. The application process may vary based on the program for which one is applying.

Prior to submitting a Medicaid application for long-term care in South Dakota, it is imperative that seniors are certain that all eligibility requirements are met. Persons who have excess income and / or assets should seriously consider Medicaid Planning for the best chance of acceptance into a Medicaid program. Applying for long-term care Medicaid can be complicated and familiarizing oneself with general information about the application process can be helpful.

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