Wisconsin Medicaid Eligibility for Long Term Care: Income & Asset Limits

Wisconsin Medicaid Long-Term Care Definition

Medicaid is a health care program for low-income people of all ages. While there are many coverage groups, the focus here is long-term care Medicaid eligibility for Wisconsin senior residents (aged 65 and over). In addition to nursing home care and services in adult foster care homes and assisted living residences, WI Medicaid also pays for non-medical support services to help frail seniors live at home or in the home of a loved one. There are three categories of Medicaid long-term care programs for which WI 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 (HCBS) – Not an entitlement; the number of participants is limited and waiting lists may exist. Intended to prevent and delay nursing home admissions, benefits are provided at home, adult day care, adult family home / adult foster care homes, or in assisted living. More on Waivers.

3) Regular Medicaid / Elderly, Blind, or Disabled – An entitlement; if eligibility requirements are met, services will be received. Various long-term care services, such as personal care assistance or adult day care, may be available.

While Medicaid is a jointly funded state and federal program, it is state administered under federally set parameters. In WI, the Wisconsin Department of Health Services’ Division of Medicaid Services (DMS) administers the state’s long-term care Medicaid Programs for the elderly.

Income & Asset Limits for Eligibility

The three categories of Medicaid long-term care programs have varying eligibility requirements. Eligibility is further complicated since the financial criteria changes annually, varies with marital status, and Wisconsin 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 Wisconsin 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 long-term care Medicaid in WI. 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. Examples include employment wages, alimony payments, pension payments, Social Security Disability Income, Social Security Income, rental income, and stock dividends. Nationally, Holocaust restitution payments are not counted as income. Furthermore, in WI, the VA Aid & Attendance & Housebound Allowances, which are above and beyond the Basic VA Pension, do not count as income.

Treatment of Income for a Couple
When just one spouse of a married couple applies for Nursing Home Medicaid or a Medicaid Waiver, only the income of the applicant is counted towards eligibility. This means the non-applicant’s income 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 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 living in poverty.

In WI, the MMMNA is $3,286.67 (eff. 7/1/23 – 6/30/24). If a non-applicant’s monthly income falls under this amount, income can be transferred from their applicant spouse, bringing their income up to $3,286.67. A non-applicant spouse can further increase their Spousal Income Allowance if their housing and utility costs exceed a “shelter standard” of $986 / month (eff. 7/1/23 – 6/30/24). 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 about how this allowance is calculated.

Income is counted differently when only one spouse applies for Regular Medicaid / Elderly, Blind, or Disabled; the income of both spouses counts toward the income eligibility of the applicant spouse. Furthermore, there is no Spousal Income 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 (resources) are added together and counted towards Medicaid’s asst limit. This includes cash, stocks, bonds, life insurance policies, investments, bank accounts (credit union, savings, and checking), and real estate in which one does not reside. In Wisconsin, an applicant’s IRA / 401K is counted. Other assets are exempt (non-countable) and have no impact on Medicaid eligibility. Exemptions include personal belongings, household items (i.e., furniture and appliances), an automobile, burial space, and generally one’s primary home. In WI, a non-applicant spouse’s IRA / 401K is 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. However, a Spousal Impoverishment Rule permits the non-applicant spouse of a Medicaid nursing home or Waiver applicant a Community Spouse Resource Allowance (CSRA). In Wisconsin, this is called a Community Spouse Asset Share (CSAS). In 2024, the CSAS 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 $50,000, 100% of the assets, up to $50,000 can be retained by the non-applicant.

Medicaid’s Look-Back Rule
Wisconsin has a 5-year Medicaid Look-Back Period that immediately precedes one’s date of Nursing Home Medicaid or Waiver application. During this period, Medicaid checks to ensure no assets were gifted or sold under fair market value. If this has been done, even by a non-applicant spouse, the Medicaid agency assumes it was done to meet Medicaid’s asset limit. Violating the Look-Back Period results in a Penalty Period of Medicaid ineligibility. The Look-Back Period does not apply to 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.

Wisconsin 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 $750,000 (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. 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. There is no home equity interest for Regular Medicaid. 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, Wisconsin’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 Nursing Home Medicaid and Medicaid Waivers, a Nursing Facility Level of Care (NFLOC) is required. Furthermore, additional criteria may need to be met for specific program benefits. As an example, for a Waiver to cover the cost of home modifications, an inability to safely and independently 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 NFLOC is not necessarily required.

Qualifying When Over the Limits

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

1) Medically Needy Pathway – Wisconsin has a Medicaid Deductible Program for seniors who have income over Medicaid’s limit. Also called a Spend Down program, persons “spend down” the majority of their income on medical bills to become income-eligible for Medicaid services. Effective Feb. 2024, the income limit for this program is $1,255 / month for an individual and $1,703.33 / month for a couple. The “deductible” / “spend down” amount is the difference between one’s monthly income and the program’s income limit. In WI, this amount is calculated for a 6-month period. Once the “deductible” has been met, one will be Medicaid income-eligible for the remainder of the period. The Medicaid Deductible Program 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 “spend down” extra assets on non-countable ones for Medicaid qualification. Examples include paying for home modifications (i.e., wheelchair ramps or stair lifts), prepaying funeral and burial expenses, and paying off debt. Remember, Wisconsin Medicaid has a “Look-Back” period of 5 years that prohibits assets from being gifted or sold under fair market value. Therefore, it is recommended one keep documentation of how assets were spent as proof the Look Back 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 individuals, 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 Wisconsin Medicaid Programs

Like all states, Wisconsin Medicaid pays for nursing home care for those persons who medically require a Nursing Home Level of Care and are financially eligible. WI 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) Family Care and Family Care Partnership – Two managed care Waiver programs that allow program participants the freedom to direct their own care, including hiring the caregiver of their choosing. This includes a spouse. The Partnership program covers medical care and prescription drugs, while Family Care only covers non-medical care. Both programs cover a variety of home and community based services, such as adult day care, assisted living services, adult foster care services, home delivered meals, and personal emergency response systems.

2) IRIS Program – This Medicaid Waiver, Include, Respect, I Self-Direct, is a consumer-directed program, and with the assistance of a case manager, a plan of care is put into place. Program participants are allotted an individualized budget with which to purchase needed services and supports. This may include adult day care, nursing services, home modifications, live-in caregivers, and more.

3) Medicaid Personal Care – Also called Medical Assistance Personal Care (MAPC), assistance with Activities of Daily Living (ADLs) and some Instrumental Activities of Daily Living (IADLs), such as bathing, grooming, mobility, meal preparation, and laundry, is provided.

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 Wisconsin Medicaid

To apply for Family Care/Family Care Partnership or IRIS in Wisconsin, or to learn more about these programs, seniors should contact their local Aging and Disability Resource Center (ADRC). Seniors can apply for Regular Medicaid, which includes Medicaid Personal Care, online at ACCESS, by phone, in person via their local Income Maintenance and Tribal Agency, or by submitting a completed paper application.

It is vital that seniors be certain that they meet all eligibility requirements prior to submitting their completed WI Medicaid application. Persons who have income and / or resources in excess of the limit(s) should consider Medicaid Planning for the best chance of receiving Medicaid benefits. Familiarizing oneself with general information about the application process can be helpful.