Medicaid has two sorts of eligibility standards for the elderly: functional and financial. Individuals must have a medical necessity in order to function.
Individuals must usually require the degree of care given in a nursing home or an intermediate care facility, with the exception of aged, blind, and disabled Medicaid. In terms of finances, Medicaid eligibility considers the applicant’s (and occasionally their spouse’s) income and assets.
The process of determining whether or not you are eligible for Medicaid is extremely complicated. However, there are a few general eligibility principles worth mentioning. Medicaid eligibility is established on a number of levels, and each state has its own set of rules that vary every year. Each target constituent group has its own requirements within each state. Elderly and frail people, for example, have different eligibility requirements than pregnant women or families with newborn children. Finally, nursing home Medicaid and Medicaid Waivers that provide home and community-based services (HCBS) may have different standards than Regular Medicaid / Aged, Blind, and Disabled. In addition, each waiver may have its own set of eligibility requirements. This page is about Medicaid long-term care for elderly.
The data below is generic and correct for the majority of states in 2022. Various criteria are used by some states.
Income eligibility criteria
A single person aged 65 or older must earn less than $2,523 per month. This is true for Medicaid nursing homes, as well as assisted living and in-home care in states that offer it through HCBS Waivers. Reparations to Holocaust survivors and COVID-19 stimulus checks are not considered income.
For married applicants, the income limits for nursing home Medicaid and HCBS Waivers are more problematic. When only one spouse is applying, only that spouse’s income is taken into account. This means that the income of the non-applicant spouse is not taken into account for establishing the applicant spouse’s income eligibility, which is capped at $2,523 per month. In addition, the applicant’s non-applicant spouse may be given a portion of the applicant’s monthly income.
This spousal protection, known as a Minimum Monthly Maintenance Needs Allowance (MMMNA), is designed to keep the non-applicant spouse from becoming impoverished. The highest amount of income that can be provided to a non-applicant spouse in most states is $3,435 per month. The non-applicant spouse’s income, when combined with the applicant spouse’s income allowance, cannot exceed $3,435 per month.
Each spouse is allocated $2,523 per month, for a total of $5,046 per month, for married couples with both spouses as applicants.
While nursing facility Medicaid and HCBS Waivers have similar financial qualifying requirements, Medicaid can also provide in-home care through the “Aged, Blind, and Disabled” (ABD) programme. The income limit for this sort of Medicaid is usually substantially lower and more stringent. Regular Medicaid, often known as State Plan Medicaid, is a type of ABD Medicaid. In around half of the states, the ABD Medicaid income limit for a single applicant is $841 per month, or $1,261 for a married couple. In the remaining states, the monthly income limit for a single applicant is $1,073 and for a married pair is $1,452. (These two estimates are based on the Federal Poverty Level and have yet to be adjusted for 2022).
Unlike nursing home Medicaid and HCBS Medicaid Waivers, the income of both couples is assessed together, even if only one spouse is an applicant. This means that the income of the non-applicant spouse has an impact on the applicant spouse’s income eligibility. Another distinction is that non-applicant spouses of ABD Medicaid beneficiaries are not eligible for the Minimum Monthly Maintenance Needs Allowance.
Candidates for Medicaid who earn more than these restrictions should consult a Medicaid planner or read the part below under “Options When Over the Limits.”
The Medicaid asset limit, commonly known as the “asset test,” is a difficult concept to grasp. Before attempting to assess if they would pass the asset test, the reader needs to be aware of many rules. There are two types of assets: “countable assets” and “exempt assets.”
The majority of the time, one’s home, furnishings, and vehicle are exempt. Second, regardless of whose name the item is in, all assets possessed by a married couple are regarded jointly owned and counted toward the asset limit. Third, asset transfers done by the applicant or their spouse within the five years (or 2.5 years in California) prior to their application date are investigated. This is known as the Medicaid Look-Back Period, and if you’ve gifted countable assets or sold them under fair market value, you’ll be eligible for Medicaid.
Determining eligibility for Medicaid
1. Financial eligibility
The Affordable Care Act provided a new mechanism for evaluating Medicaid eligibility based on Modified Adjusted Gross Income (MAGI) (MAGI). MAGI is used to evaluate financial eligibility for Medicaid, CHIP, and the health insurance marketplace’s premium tax credits and cost-sharing reductions. The Affordable Care Act made it easier for people to apply and enroll in the right programme by using a single set of income counting standards and a single application across programmes.
For most children, pregnant women, parents, and adults, MAGI is used to determine Medicaid income eligibility. To evaluate financial eligibility for Medicaid, the MAGI-based methodology takes into account taxable income and tax filing relationships. The previous technique for determining Medicaid eligibility, which was based on the methodology of the Aid to Families with Dependent Children programme, which terminated in 1996, was replaced by MAGI. The MAGI-based methodology excludes income disregards that differ by state or eligibility group, as well as an asset or resource test..
Some people are exempt from the MAGI-based income counting regulations, such as those who are blind, disabled, or over the age of 65. (65 and older). Individuals 65 and older, or those who are blind or disabled, are generally eligible for Medicaid based on the income methodologies of the Social Security Administration’s SSI programme (some states, known as 209(b) states, use more stringent eligibility criteria than SSI, but still largely apply SSI methodologies). SSI techniques are used to evaluate eligibility for the Medicare Savings Programs, through which Medicaid pays Medicare premiums, deductibles, and/or coinsurance expenses for individuals eligible for both programmes (commonly referred to as dual eligibles).
The Medicaid agency does not have to determine income for some Medicaid eligibility groups. Enrollment in another programme, such as SSI or the breast and cervical cancer treatment and prevention programme, may provide coverage. Children who are covered by an adoption assistance arrangement under the Social Security Act’s chapter IV-E are immediately eligible. At whatever income level, young adults who meet the criteria for qualifying as a former foster care beneficiary are also eligible.
2. Non-financial eligibility
Individuals must also meet some non-financial eligibility criteria to be eligible for Medicaid. Medicaid recipients must generally be residents of the state in which they receive benefits. They must either be US citizens or meet particular criteria for non-citizens, such as lawful permanent residents. Furthermore, some qualifying categories are restricted due to age, pregnancy, or parental status.
Eligibility by care type
1. Nursing home eligibility
Financial and care standards must be met in order to be eligible for Medicaid nursing home care. The financial criteria are divided into two categories: income and asset limits. These are detailed in the preceding section. The level of care criteria simply implies that the applicant must require the same amount of care as a nursing home resident. While this may seem self-evident, “Nursing Home Level of Care” (NHLOC) is a formal designation that must be made by a medical doctor. Furthermore, the laws governing what constitutes NHLOC vary by state.
Medicaid pays for nursing home care as a right. This means that if a person fits the financial and level of care requirements, the state is obligated to pay for their nursing home care.
2. Assisted living eligibility
Prior to reviewing Medicaid’s assisted living / senior living eligibility standards, it is important for the reader to understand how Medicaid pays for assisted living. Assisted living residents are eligible for Medicaid support through HCBS Waivers or the state’s Aged, Blind, and Disabled (ABD) Medicaid programme.
HCBS Waivers are meant for those who need nursing home-level care but choose to receive it at home or in an assisted living facility. This could include “memory care,” a sort of specialized assisted living for people who have Alzheimer’s disease or other dementias. HCBS Waivers do not cover the price of assisted living room and board, but they do cover the costs of care. Waivers aren’t the same as entitlements. They are state-specific initiatives that have been approved by the federal government and have a limited number of participants. Many waivers, particularly ones aimed to assist people in assisted care facilities, have waiting lists. To be clear, a person can be financially and functionally eligible for an assisted living waiver yet not be able to enroll owing to a waiting list.
The qualifying requirements for Medicaid assisted living services provided through a Medicaid HCBS Waiver are the same as those for nursing home care. Candidates must meet the above-mentioned cost limits and require “nursing home level of care.”
Medicaid for the Aged, Blind, and Disabled (ABD) helps those who live in assisted living facilities, but unlike Waivers, it only pays for treatment, not room and board. ABD Medicaid will not always cover all of an individual’s medical requirements. When compared to Waivers, the good news with ABD Medicaid is that it is an entitlement. If the applicant meets the eligibility requirements, the Medicaid programme is required to give them the necessary support.
ABD Medicaid has stricter income restrictions than Medicaid Waivers. ABD Medicaid, on the other hand, does not normally require recipients to be in a “nursing home level of care.” The financial eligibility criteria for ABD Medicaid are state-specific. The regulations of their state can be found here.
3. In-Home care eligibility
Medicaid recipients can get help at home through a Home and Community Based Services (HCBS) Waiver or Medicaid for the Aged, Blind, and Disabled (ABD). There are two sorts of Medicaid programmes, each with its own set of qualifying rules.
In all 50 states, waivers include home care as a benefit. HCBS Waivers, however, are not entitlements. As a result, just because you’re eligible doesn’t imply you’ll get help. It is extremely likely that one will be placed on a waiting list for help. Waivers have the same level of care as nursing home Medicaid and the same financial eligibility requirements. These restrictions are outlined above.
ABD Medicaid also covers in-home care, and unlike HCBS Waivers, it is a government-funded programme. Typically, ABD Medicaid has more stringent financial eligibility requirements and less stringent eligibility requirements.
Effective date of coverage
Once a person is judged to be eligible for Medicaid, coverage begins on the day of application or the first day of the month following the date of application. Benefits may also be paid back up to three months before the month of application if the individual would have been eligible during that time if he or she had applied. Coverage usually ends at the end of the month when a person no longer meets the eligibility standards.
States can create a “medically needy programme” for people with serious health problems whose income is too high to qualify for Medicaid under the other eligibility categories. Individuals who are medically needy can still qualify by “spending down” the portion of their income that exceeds the state’s medically needy income criterion. Individuals spend down by incurring medical and remedial care charges for whom they do not have health insurance. A person may be eligible for Medicaid if their out-of-pocket expenses surpass the difference between their income and the state’s medically needy income level (the “spenddown” amount). The Medicaid programme then pays for any services that are more expensive than the costs of becoming eligible.
Furthermore, even if the state has a medically needy programme, 209(b) states must provide a spend down to the income eligibility thresholds for groups based on blindness, handicap, or age (65 and older). Spend down programmes are used by 36 states and the District of Columbia, either as medically needy programmes or as 209(b) states.
Individuals must be given the chance to request a fair hearing in the event of a refusal, an erroneous action taken by a state agency, or if the state has not acted with reasonable promptness. States can structure their appeals systems in a variety of ways. The Medicaid agency may handle appeals, or they may be assigned to the Exchange or Exchange Appeals Entity (for appeals of denials of eligibility for individuals whose income is determined based on MAGI). If a state obtains CMS permission under the Intergovernmental Cooperation Act of 1968, appeals may also be assigned to another state agency.
CIB: Coordination between HHS appeals entity and Medicaid and CHIP agencies – Assessment states
This Informational Bulletin explains federal regulations and offers technical support for coordinating appeals among insurance affordability programmes in states that have chosen to use the Federally Facilitated Exchange (FFE) to determine Medicaid and CHIP eligibility (“assessment states”).
Appendix 1: States treating HHS Appeals Entity decisions as eligibility assessments includes three scenarios that show the specific steps that assessment states must take after receiving an Electronic File Transfer from the Department of Health and Human Services (HHS) Appeals Entity if the state has chosen to treat HHS Appeals Entity decisions as Medicaid or CHIP eligibility assessments.
Options when over the limits
Individuals or couples who earn too much money and/or have too many assets to qualify for Medicaid but cannot afford long-term care can still get help. Medicaid has a variety of eligibility paths and tactics for obtaining eligibility.
1. Medically needy pathway
Medically needy Medicaid, also known as “Share of Cost” Medicaid, is offered in 32 states and Washington, D.C. at the moment. In a nutshell, the Medically Needy Pathway takes into account a Medicaid applicant’s income as well as their healthcare bills. If Medicaid determines that a person’s long-term care expenditures absorb the bulk of their income, the person will be considered eligible as long as their monthly income does not surpass the cost of their long-term care. Medically Needy Income Limits (MNILs) are the levels at which people must “spend down” their monthly income on health-care costs in order to qualify for Medicaid through this route. The Medically Needy Income Limit is known by several names depending on the state. In Vermont, for example, it is known as the Maintenance Needs Allowance.
Example: John resides in California, earns $4,500 a month, and receives a $600 Maintenance Needs Allowance from the state. He needs 40 hours of home care each week at a rate of $25 per hour. His monthly care costs are $4,000 (four weeks x forty hours x $25 = $4,000). John would be eligible for California Medicaid (Medi-Cal) through the Medically Needy Pathway because his monthly income is $500 after paying for his home care and California’s Maintenance Needs Allowance is $600.00.
2. Miller trusts or Qualified Income Trusts (QITs)
QITs are a planning strategy for people who earn too much to qualify for Medicaid. In an oversimplified explanation, an applicant’s monthly income exceeding the limit is placed in a QIT and does not count toward Medicaid’s income restriction. The money in the trust, which is handled by someone other than the Medicaid applicant, can only be utilized for a limited number of purposes. Paying Medicare premiums and medical bills not covered by Medicaid are two examples.
Options when over the asset limit
Neither the Medically Needy Pathway nor Qualified Income Trusts can help Medicaid applicants who have accumulated assets in excess of the asset limit become asset eligible. There are, nevertheless, a number of planning options that might help Medicaid applicants reduce their taxable assets. The most straightforward option is to “spend down” surplus assets on health-care expenses.
Use a spend-down calculator to figure out how much money you’ll need to qualify for Medicaid.
Purchasing an irrevocable funeral trust, converting a lump sum of cash into monthly income via annuities, putting assets into Medicaid asset protection trusts, and using the Modern “Half a Loaf” strategy, which combines the use of annuities with gifting assets, are some of the more complicated options. Medicaid divorce and spousal rejection are two less-used strategies. There are also lady bird deeds, which can shield a home from Medicaid’s estate recovery programme and pass it along to family members as an inheritance. Some of these options are in violation of Medicaid’s look back rule, resulting in a term of Medicaid ineligibility. Before pursuing these alternatives, it is strongly recommended that individuals with assets in excess of the asset limit speak with a competent Medicaid planner.
Medicaid Planning is a technique for those who earn too much money and/or have too many assets to qualify for Medicaid. A Medicaid expert can help these people restructure their finances so that they can qualify. We’ve written a lot about the benefits and drawbacks of Medicaid planning, as well as the many types of Medicaid planners. Is Medicaid Planning Ethical? from the New York Times is also worth reading.
Protects the spouse of a Medicaid applicant or recipient who requires long-term services and supports (LTSS) in an institution, a home, or another community-based setting from becoming impoverished in order for the spouse who needs LTSS to get Medicaid coverage.
Treatment of trusts
When an individual, his or her spouse, or anybody acting on the individual’s behalf creates a trust with at least some of the individual’s finances, that trust can be used to determine Medicaid eligibility.
Transfers of assets for less than fair market value
If a Medicaid beneficiary has transferred assets for less than fair market value in the five years leading up to their Medicaid application, they will be refused LTSS coverage. Individuals (or their spouses) who require LTSS in a long-term care facility or who desire to receive home and community-based waiver services have transferred, sold, or gifted assets for less than their value are subject to this rule.
The cost of certain benefits paid on behalf of a Medicaid enrollee, such as nursing facility services, home and community-based services, and related hospital and prescription drug services, must be recovered from the enrollee’s estate. Except for Medicare cost-sharing benefits provided on behalf of Medicare Savings Program participants, state Medicaid programmes may recoup for other Medicaid benefits.
Third party liability
Third-party liability refers to third parties who are legally obligated to cover all or part of the cost of medical services provided to a Medicaid beneficiary. Other programmes, such as Medicare, or other health insurance that a person may have that covers at least a portion of the cost of a medical service are examples. If a third party is responsible for a portion of the cost, Medicaid will only cover that portion.
Waivers and demonstrations
States can apply to the Centers for Medicare and Medicaid Services (CMS) for waivers to provide Medicaid to those who aren’t covered by the state plan. Additional state-only programmes exist in some states to give medical help to low-income people who do not qualify for Medicaid. There are no federal monies available for state-only initiatives.
The bottom line
Your monthly income must be less than $1,357 for an individual and $1,823 for a married couple to qualify. A single person’s resource limit is $7,280, and a married couple’s limit is $10,930 to be able to apply for Medicaid. A SLMB insurance (Specified Low-Income Medicare Beneficiary) assists you in paying your Medicare Part B premium.