Washington DC Medicaid Eligibility for Long Term Care: Income & Asset Limits

Washington DC Medicaid Long-Term Care Definition

Medicaid is a health insurance program for low-income individuals of all ages. While coverage is provided for varying groups of Washington DC residents, the focus here is on long-term care Medicaid eligibility for elders, aged 65 and over. In addition to providing nursing home care, services and supports can be provided at home, adult foster care homes, and assisted living facilities. There are three categories of Medicaid long-term care programs for which DC seniors may be eligible.

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

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

3) Regular Medicaid / Aged, Blind and Disabled (ABD) – An entitlement; as long as eligibility requirements are met, one will receive assistance. Limited 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 within federally set parameters. In Washington DC, the Department of Health Care Finance (DHCF) is the administering agency.

Income & Asset Limits for Eligibility

The three categories of Medicaid long-term care programs have differing financial and medical (functional) eligibility requirements. Further complicating financial eligibility is that the requirements change annually, vary with marital status, and that Washington DC offers multiple pathways towards Medicaid 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 Washington DC Medicaid program. Alternatively, persons 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 the District of Columbia. More.

Income Definition & Exceptions

Countable vs. Non-Countable Income
Almost any income from any source that a Medicaid applicant receives is counted towards the income limit. Examples include employment wages, alimony payments, railroad retirement, pension payments, Social Security Disability Income, Social Security Income, Supplemental Security Income, IRA withdrawals, and stock dividends. Nationally, Holocaust restitution payments are not counted as income. Furthermore, in DC, VA Aid & Attendance payments, 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). This income allowance, also called a Community Maintenance Needs Allowance (CMNA) in Washington DC, is a Spousal Impoverishment Provision. It is said to be the minimum amount of monthly income the non-applicant spouse requires to avoid poverty. In DC, the MMMNA is $3,853.50. If a non-applicant’s monthly income falls under this amount, income can be transferred to them from their applicant spouse, bringing their income up to $3,853.50/ month.

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. Furthermore, there is no Community Maintenance Needs Allowance for a non-applicant spouse. More on how Medicaid counts income.

Asset Definition & Exceptions

Countable vs. Non-Countable Assets
The value of countable assets (also called resources) are added together and counted towards the 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 are not counted; they are exempt from the eligibility limit. Exemptions include personal belongings, such as clothing, household furnishings, a vehicle, a burial plot for the applicant and spouse, life insurance, given the face value is not greater than $1,500, and generally one’s primary home. In Washington DC, IRAs / 401Ks are also exempt.

Treatment of Assets for a Couple
All assets of a married couple are considered jointly owned. This holds 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 CSRA allows the community spouse (the non-applicant spouse) to retain 50% of the couple’s assets, up to a maximum of $154,140. If the non-applicant’s share of the assets falls under $30,828, 100% of the assets, up to $30,828 can be kept by the non-applicant.

Medicaid’s Look-Back Rule
It is vital that one does not give away assets or sell them for less than fair market value within 60 months (5 years) of applying for Nursing Home Medicaid or a Medicaid Waiver. This is because Washington DC has a Medicaid Look-Back Period in which the Medicaid agency scrutinizes all past asset transfers. This includes transfers made by a non-applicant spouse. If assets have been gifted or sold under fair market value during this period, the Medicaid agency assumes it was done to meet Medicaid’s asset limit. A Penalization Period in the form of Medicaid ineligibility is calculated for persons who violate the Look-Back Period. There is no Look-Back Period for Regular Medicaid.

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

Washington DC 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 $1,071,000 (in 2024). Home equity is the value of the home, minus any outstanding debt against it. Equity interest is the amount of home equity owned by the applicant. Additionally, 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 applicants, the home equity interest limit does not apply. 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, Washington DC’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 long-term care Medicaid. For Institutional Medicaid and Medicaid Waivers, a Nursing Home Level of Care (NHLOC) is required. Furthermore, some program benefits, such as home modifications, may have further eligibility, such as an inability to safely live at home without modifying the home. 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 Washington DC elderly residents (aged 65 and over) who do not meet the financial eligibility requirements above, there are other ways to qualify for Medicaid.

1) Medically Needy Pathway – Washington DC has a Medically Needy Spend Down Program that allows those who would otherwise be over the income limit to still qualify for Medicaid if they have high medical expenses. In simple terms, one “spends down” their income on private health insurance, prescription medications, unpaid medical bills, and medical expenses that Medicaid does not cover. The Medically Needy Income Limits (MNILs), effective 2/1/24 – 1/31/25, are $809.08 / month for an individual and $851.67 / month for a couple.

2) Asset Spend Down – Persons who have assets over Medicaid’s eligibility limit can still become asset-eligible by “spending down” excess assets on non-countable ones. Examples include making home modifications (i.e., addition of wheelchair ramps or 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 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 Washington DC Medicaid Programs

Like all states, Medicaid in Washington DC pays for nursing home care for state residents who are medically and financially eligible for such care. DC Medicaid also offers programs for seniors who require nursing home level care or have slightly lesser care requirements and do not wish to reside in a nursing home. These programs provide care at home or “in the community”.

1) Adult Day Health Program (ADHP) – Part of the Regular Medicaid plan, adult day health care is available as a nursing home diversion service. Program participants receive personal care assistance, supervision, meals, and therapeutic activities during daytime hours in adult day care centers.

2) Elderly and Persons with Physical Disabilities (EPD) Medicaid Waiver – Provides benefits promoting independent living at home, in adult foster care, and in assisted living for persons who are aged and disabled. An option, Services My Way, allows program participants to hire the individual of their choosing, including adult children, to provide personal care services. Other benefits include adult day health care, personal emergency response systems, home modifications, respite care, and homemaker services.

3) State Plan Personal Care Aide (PCA) Services Program – Personal care assistance is provided to seniors and persons with disabilities to assist them in living at home. This includes assistance with daily living activities, such as bathing, grooming, dressing, eating, mobility, grocery shopping, and meal preparation.

4) 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.

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 Washington DC Medicaid

To apply for Medicaid in the District of Columbia, seniors can online at District Direct, by phone at 202-727-5355, or via paper application (Combined Application for Food, Medical, & Cash Benefits). Completed applications can be mailed to the Department of Human Services, Economic Security Administration, Case Record Management Unit, P.O. Box 91560, Washington, DC 20090, faxed to 202-671-4400, or returned to one’s local Economic Security Administration (ESA) Service Center. Persons might find the Aging and Disability Resource Center helpful with the application process, which may vary based on the program for which one is applying.

Prior to applying for Medicaid in Washington DC, senior applicants should be certain 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. In these cases, persons should seriously consider Medicaid Planning for the best chance of acceptance into a Medicaid program. Learn more about applying for long-term care Medicaid.