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

Vermont Medicaid Long-Term Care Definition

Medicaid is a health care program for low-income individuals of any age. While there are many differing coverage groups, the focus here is long-term care Medicaid eligibility for Vermont residents, aged 65 and over. In addition to nursing home care, assisted living services, and adult family care home (adult foster care) services, Vermont Medicaid pays for many non-medical support services that help frail seniors live in their own home or the home of a loved one. There are three categories of Medicaid long-term care programs for which Vermont seniors may be eligible.

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

2) Medicaid Waivers / Home and Community Based Services – Not an entitlement; there are a limited number of participant slots and waiting lists may exist. Intended to prevent and delay nursing home admissions, benefits are provided at home, adult day care, or in assisted living. More on Waivers.

3) Regular Medicaid / Medicaid for the Aged, Blind and Disabled (MABD) – An entitlement; meeting the eligibility requirements ensures assistance will be provided. Various long-term care benefits, such as personal care assistance or adult day care, may be available.

The authority under which Vermont’s entire Medicaid program, which is called Green Mountain Care, is operated is the Global Community to Health Waiver, an 1115(a) Medicaid Waiver. The state’s Medicaid long-term care program is called Choices for Care. While Green Mountain Care is federal and state funded, the Department of Vermont Health Access (DHVA) administers it.

Income & Asset Limits for Eligibility

The three categories of Medicaid long-term care programs have differing eligibility requirements. Further complicating financial eligibility is that the criteria changes annually, varies with marital status, and that Vermont offers multiple pathways towards eligibility.

The table below provides a quick reference to allow seniors to determine if they might be immediately eligible for long-term care from a Vermont Medicaid / Green Mountain Care 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 VT. More.

Income Definition & Exceptions

Countable vs. Non-Countable Income
Nearly any income from any source that a Medicaid applicant receives is counted towards Medicaid’s income limit. This includes employment wages, alimony payments, pension payments, Social Security Disability Income, Social Security Income, IRA withdrawals, and stock dividends. Nationally, Holocaust restitution payments are not counted as income. Furthermore, in VT, the VA Aid & Attendance and Housebound Pensions, which are above and beyond the Basic VA Pension, do not count as income.

Treatment of Income for a Couple
When only one spouse of a married couple applies for Institutional Medicaid or a Medicaid Waiver, only the income of the applicant is counted. This means the income of the non-applicant spouse is disregarded and 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) / Spousal Income Allowance. 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 living in poverty.

In 2024, the MMMNA in VT is $2,555. If a non-applicant’s monthly income falls under $2,555, monthly income can be transferred to them from their applicant spouse, bringing their income up to $2,555. A non-applicant spouse can further increase their Spousal Income Allowance if their housing and utility costs exceed a “shelter standard” of $767 / month. However, a Spousal Income Allowance cannot push a non-applicant’s total monthly income over $3,853.50. This is the Maximum Monthly Maintenance Needs Allowance. More on how the Spousal Income Allowance is calculated.

Income is counted differently when only one spouse applies for Regular Medicaid / Medicaid for the Aged, Blind and Disabled; the income of both the applicant spouse and non-applicant spouse is calculated towards the applicant’s income eligibility. Furthermore, there is no Spousal Income Allowance for a non-applicant spouse. More on how Medicaid calculates income for eligibility purposes.

Asset Definition & Exceptions

Countable vs. Non-Countable Assets
The value of countable assets are added together and counted towards Medicaid’s asset limit. This includes cash, stocks, bonds, investments, bank accounts (credit union, savings, and checking), and real estate in which one does not reside. There are also many assets that Medicaid considers to be exempt (non-countable). Exemptions generally include one’s primary home, personal belongings, household furnishings, an automobile, and irrevocable burial trusts up to $10,000. In Vermont, IRAs / 401Ks are exempt if they are in payout status. This means that one’s required minimum distribution (RMD) is being withdrawn.

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. The non-applicant spouse of an Institutional Medicaid or Medicaid Waiver applicant, however, is permitted a Community Spouse Resource Allowance (CSRA).In 2024, the community spouse (the non-applicant spouse) can retain up to $154,140 of the couple’s assets. There is no CSRA for the non-applicant spouse of a Regular Medicaid applicant.

Medicaid’s Look-Back Rule
Vermont has a 60-month Medicaid Look-Back Rule that immediately precedes one’s Nursing Home Medicaid or Medicaid Waiver application date. During this period, Medicaid checks to ensure no assets were gifted or sold under fair market value. If one violates the Look-Back Period, even unintentionally, the Medicaid agency assumes it was done to meet Medicaid’s asset limit. A Penalty Period of Medicaid ineligibility is calculated for persons who violate this rule. The Look-Back Period does not apply to Regular Medicaid applicants.

The U.S. Federal Gift Tax Rule does not extend to Medicaid eligibility. In 2024, this rule 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 Rule.

Vermont Medicaid Home Exemption Rules

For home exemption, the Medicaid applicant or their spouse must live in their home. If there is no spouse in the home, there is a home equity interest limit of $713,000 (in 2024). Home equity is the value of the home after subtracting any outstanding debt against it. Equity interest is the amount of home equity owned by the applicant. Furthermore, if there is not a spouse in the home, and the Medicaid applicant does not live there, the applicant must have Intent to Return. For Regular Medicaid, there is no home equity interest limit. Other exemptions exist.

While one’s home is usually 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, Vermont’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 functional need for Medicaid long-term care. For Institutional Medicaid and Medicaid Waivers, an applicant must require a Nursing Home Level of Care (NHLOC). Furthermore, certain benefits may have additional eligibility requirements specific to that benefit. For example, for a Waiver to cover home modifications, an inability to safely live at home without modifications may be required. For long-term care services via the Regular Medicaid program, a functional need with the Activities of Daily Living (ADLs) is required, but a NHLOC is not necessarily required.

Qualifying When Over the Limits

For Vermont residents, aged 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 – Vermont has a Medicaid “Spend-Down” Program for seniors who have income over the Medicaid limit. This program allows them to become income-eligible for Medicaid services by spending the majority of their income on medical expenses. Examples include health insurance deductibles and premiums, past due medical bills, over-the-counter medications, and uncovered medical items. In 2024, the Medically Needy Income Limit (MNIL) is $1,300 month for an individual or a couple outside of Chittenden County, and is $1,408 / month for an individual or couple in Chittenden County. The “spend-down” amount is the difference between one’s monthly income and the MNIL. It can be thought of as a deductible. Once one has met their “spend-down”, they will be income-eligible for the remainder of the month. The Medically Needy Asset Limit is $2,000 for an individual and $3,000 for a couple.

2) Asset Spend Down – Seniors who have assets over Medicaid’s limit can still become asset-eligible by “spending down” assets on ones that are non-countable (exempt). Examples include making home modifications to allow aging in place (i.e., the addition of wheelchair ramps or stair lifts), 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 assets were spent as evidence this rule was not violated.

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’s Estate Recovery Program. Connect with a Medicaid Planner.

Specific Vermont Medicaid Programs

Medicaid in Vermont (Green Mountain Care) pays for state residents to reside in a nursing home if they medically require that level of care and qualify financially for the program. The state also offers a number of programs that help nursing home qualified individuals (and those with lesser care requirements) to live outside of nursing homes.

1) Choices for Care (CFC) – This waiver program helps nursing home qualified seniors and persons with disabilities avoid nursing homes and live in assisted living communities, adult foster care homes, or at home. A separate eligibility group called the Choices for Care Moderate Needs Group also receives benefits such as adult day care and financial assistance for home modifications to increase one’s ability to function independently. For the Moderate Needs Group, one does not have to be eligible for Medicaid.

2) Attendant Services Program (ASP) – This is a Medicaid entitlement program that provides for a personal care attendant to help participants manage their Activities of Daily Living (i.e., bathing, dressing, eating). Select relatives can be hired to provide care.

3) Adult Day Services Program – An entitlement program that helps with daytime supervision, meals, medication management, and transportation to / from the day care center. This program enables working families to hold jobs while caring for a loved one at home.

4) Assistive Community Care Services (ACCS) – Assisted living-like care program for persons who cannot function independently at home, but don’t require the level of care provided in a nursing home.

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

How to Apply for Vermont Medicaid

To apply for Medicaid for the Aged, Blind and Disabled (MABD), Vermont residents can apply online, call 855-899-9600 to request a paper application (205ALLMED) be mailed to their home, or print the Application for Health Coverage and Help Paying Costs from this webpage. Completed applications can be mailed to Vermont Health Connect, Application and Document Processing Center, 280 State Drive, Waterbury, VT, 05671-1500.

To apply for Choices for Care, one needs to complete the Application for Long-Term Care Medicaid (Form 202LTC), which can be found on this webpage, halfway down the page. Alternatively, seniors can call 800-479-6151 to request the application be mailed to their home. The completed application can be mailed to the same address mentioned above for MABD.

Persons might find their local Area Agency on Aging office helpful with the application process. Additionally, Vermont offers “Assisters” that are available to answers questions and help one apply for Green Mountain Care. Find an Assister.

Prior to submitting an application for Medicaid benefits in Vermont, senior applicants should be positive that they meet all eligibility requirements for the program for which they are applying. Being over the income and / or asset limit(s), or being uncertain if eligibility criteria are met, can result in a denial of benefits. Persons in these situations should seriously consider Medicaid planning for the best chance of acceptance into a Medicaid program. Familiarizing oneself with general information about the long-term care Medicaid application process can be helpful.