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

Washington Medicaid Long-Term Care Definition

Medicaid is a health insurance program for low-income individuals of any age. While there are varying coverage groups, the focus here is long-term care Medicaid eligibility for elderly Washington residents (65 years of age and older). In addition to paying for nursing home care, WA Medicaid pays for services and supports to help frail seniors to continue living at home, an adult family home (adult foster care), or an assisted living facility. There are three categories of Medicaid long-term care programs for which Washington seniors may be eligible.

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

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

3) Regular Medicaid / Aged, Blind, Disabled – An entitlement; anyone who meets the eligibility requirements is able to receive benefits. Various long-term care benefits, such as personal care assistance or adult day care, may be available.

Medicaid in Washington is called Washington Apple Health or simply Apple Health. While this program is jointly funded by the state and federal government, it is administered by the state within federally set parameters. Washington State Health Care Authority is the administering agency.

Income & Asset Limits for Eligibility

The three categories of Medicaid long-term care programs have differing financial and medical eligibility criteria. Further complicating eligibility is that financial requirements change annually, the eligibility rules differ for single versus married applicants, and Washington offers multiple pathways to 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 WA 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 Washington Medicaid.  More.

Income Definition & Exceptions

Countable vs. Non-Countable Income
Nearly any income that a Medicaid applicant receives is counted towards Medicaid’s income limit. Countable income 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 WA, 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 Nursing Home Medicaid or a Medicaid Waiver, only the income of the applicant is counted towards income eligibility. 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 a Spousal Impoverishment Rule and is the minimum amount of monthly income a non-applicant spouse is said to require to avoid poverty.

The MMMNA in WA is $2,555 (eff. 7/1/24 – 6/30/25). If a non-applicant spouse’s income is under $2,555 / month, 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 $766.50 / month (eff. 7/1/24 – 6/30/25).  However, in 2024, 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 this allowance is calculated.

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

Asset Definition & Exceptions

Countable vs. Non-Countable Assets
Countable assets are 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. In WA, IRA’s / 401K’s are also counted. Medicaid considers many assets to be exempt (non-countable). Exemptions include personal belongings, household furnishings, an automobile, irrevocable burial trusts, 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 a senior 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 of a Nursing Home Medicaid or Medicaid Waiver applicant. In 2024, the community spouse (the non-applicant spouse) can keep 100% of the couple’s assets, up to $68,301. If the applicant spouse is in a nursing home, the community spouse may be able to retain a higher amount of assets. If the couple’s assets are greater than $136,602, the non-applicant spouse is entitled to 50% of the couple’s assets, up to a maximum of $154,140. There is no CSRA for Regular Medicaid.

Medicaid’s Look-Back Rule
Washington has a 5-year Medicaid Look-Back Period for Nursing Home Medicaid and Medicaid Waivers that immediately precedes the date of one’s Medicaid application. During this period, Medicaid scrutinizes all past asset transfers to ensure no assets were gifted or sold for less than fair market value. If this has been done, Medicaid assumes it was to meet Medicaid’s asset limit. Persons who violate the Look-Back Rule are penalized with a Penalty Period

of long-term care Medicaid ineligibility. This rule does not apply to Regular Medicaid applicants.

The U.S. Federal Gift Tax Rule does not apply 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 Period.

Washington 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 the home’s equity that is owned by the applicant. If there is not a spouse living 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 (MERP). Following a long-term care Medicaid beneficiary’s death, Washington’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 long-term care Medicaid. For Nursing Home Medicaid and Medicaid Waivers, a Nursing Facility Level of Care (NFLOC) is required. Some program benefits may have additional eligibility criteria specific to that benefit. For example, for a Waiver to cover the cost of a personal emergency response system, it may be required that one need it to safely live in their 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 NFLOC is not necessarily required.

Qualifying When Over the Limits

For Washington residents, aged 65 and over, who do not meet the financial eligibility requirements above, there are other ways to qualify for long-term care Medicaid.

1) Medically Needy Pathway – Washington’s Medically Needy (MN) or Medically Needy Program (MNP) allows seniors who have income over Medicaid’s limit to still become income-eligible if they have high medical expenses. Sometimes called a Spenddown program, one’s “excess” income is used to cover medical bills. This may include medical transportation, health insurance deductibles, hospital visits, medical supplies, and prescription drugs. The amount one must “spend down” is the difference between one’s monthly income and the Medically Needy Income Limit (MNIL). This can be thought of as a deductible. In 2024, the MNIL in WA is $943 / month for a single senior applicant, as well as for a married couple. The spend-down period is either three or six months, based on the decision of the Medicaid applicant. Once one has met their spenddown, they are income-eligible for Medicaid services for the remainder of the period. The Medically Needy Pathway has an asset limit of $2,000 for an individual and $3,000 for a couple.

2) Asset Spend Down – Persons who have assets over Medicaid’s asset limit can still qualify for Medicaid by “spending down” extra assets. This can be done by spending countable assets on things that are exempt (non-countable). Examples include making home renovations and modifications (wheelchair ramps, chair lifts, new plumbing or heating system), prepaying funeral and burial expenses, and paying off debt. One must be cautious when “spending down” assets to avoid violating 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 and to protect their home from Medicaid’s Estate Recovery Program.  Connect with a Medicaid Planner.

Specific Washington Medicaid Programs

In addition to nursing home care, Apple Health (Washington Medicaid) provides a variety of home and community based programs to help qualified persons live outside of nursing homes.

1) Community First Choice Option (CFCO) – Program participants can receive personal care assistance, personal emergency response systems, assistive technology, in-home respite care, and transitional services from residential living back into the community. Program participants are given the option to choose their own care providers, including some relatives.

2) Medicaid Personal Care (MPC) Program – While many persons receive personal care services via CFCO, some Medicaid participants receive this benefit via MPC. Assistance via CFCO requires one need a Nursing Home Level of Care, while personal care services via MPC is for persons who do not have such a high care need.

3) New Freedom (NF) Waiver  – Program benefits include in-home personal care, financial support for home modifications that enable the resident greater independence, and education and training for family caregivers. This program is only available in King and Pierce Counties.

4) Medicaid Alternative Care (MAC) Program – Intended to support individuals at home and their unpaid caregivers, a variety of long-term services and supports are available. This may include coverage for medical alert services, adult day care, home delivered meals, respite care, and transportation.

5) Specialized Dementia Care Program (SDCP) – A program designed specifically for individuals with dementia that reside in assisted living / memory care residences.

6) Tailored Supports for Older Adults (TSOA) Program – Provides assistance to both needy individuals and their unpaid caregivers. This program is unique in that it is funded by Medicaid, but serves persons who are not financially eligible for Medicaid.

7) Community Options Program Entry System (COPES) – Participants can receive services at home, in an adult family home, or in assisted living. Waiver benefits may include skilled nursing, meal delivery, adult day care, durable medical equipment, and home modifications.

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

9) Money Follows the Person (MFP) – Also called Roads to Community Living in Washington. This federal program helps institutionalized persons who are eligible for Medicaid to transition back home or into the community.

How to Apply for Washington Medicaid

Seniors can apply for Apple Health online at Washington Connection, by calling the Department of Social and Health Services (DSHS) at 877-501-2233, or by mailing a completed paper application (Washington Apple Health Application for Aged, Blind, Disabled / Long-Term Services and Supports). The mailing address is on the application and differs based on the Medicaid program for which one is applying. Seniors can also apply in person at their local DSHS office. One’s local Area Agency on Aging office may be helpful in answering program questions or assisting with the application process. The application process may vary based on the specific program.

Prior to applying for Apple Health benefits in Washington, senior applicants should be positive that they meet all eligibility requirements for the program for which they are applying. Having income and / or assets over the limit(s), or being uncertain if eligibility criteria are met, can result in a denial of Medicaid 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 Medicaid long-term care application process can be helpful.