How Your State Impacts Your Medicaid Eligibility Requirements

Summary
Medicaid is a public insurance program jointly funded by individual states and the federal government. States must obey specific Medicaid guidelines before the federal government will match their financial contributions, but the federal guidelines are very broad, so each state has flexibility with its own program. This means that Medicaid rules, benefits and eligibility criteria can all vary from state to state, and the nuances are extensive. Below you’ll find our 50-State Guide, which details Medicaid in every state and Washington, D.C.

 

Click on the name of your state in the table below to learn about its Medicaid Long Term Care programs, benefits, regulations and eligibility requirements. Below the table you’ll find an overview of some of Medicaid’s key concepts and how they cross over and vary by state.

 Toolbox: To find the specific eligibility criteria for your state and situation, use our Medicaid Eligibility Requirements Finder tool by clicking here.

 

Eligibility Variations by State

As we mentioned above, Medicaid Long Term Care rules, benefits and eligibility criteria can all can all change depending on the state where the Medicaid applicant or recipient resides. The following sections will discuss some of Medicaid’s key concepts that can vary by state.

 

Benefits and the 3 Types of Medicaid

There are three types of Medicaid relevant to seniors – Nursing Home Medicaid, Home and Community Based Services (HCBS) Waivers and Aged, Blind and Disabled (ABD) Medicaid.

Nursing Home Medicaid covers all expenses associated with nursing home care, including room and board. This coverage does not vary much by state, although the number of nursing homes and availability of beds can certainly change depending on where you live.

HCBS Waivers provides long-term care services and supports in the recipient’s home or somewhere else in the community, like the home of a loved one or an assisted living facility. The number and type of HCBS Waivers can vary greatly by state, as can the benefits provided by those Waivers. Some Waivers in some states might cover major home modifications like widening all doorways and adding multiple wheelchair ramps and electric lifts, while other Waivers in other states may only cover minor home modifications like grab bars in the bathroom. Most benefits offered by HCBS Waivers can vary in scope like this, such as the hours of in-home personal care provide or the number of nurse visits per month, and some states and Waivers may not offer them at all. There is also variations in where the HCBS Waiver will provide its benefits – some will only provide them in the recipient’s home, others will extend to the home of a loved one, and others will include assisted living facilities and adult foster care homes. What’s more, most HCBS Waiver programs have a limited number of enrollment spots that vary by program. Once those spots are full, additional applicants are placed on a waitlist that could last weeks, months or years.

ABD Medicaid also provides coverage for people living in the community, whether that’s their own home or somewhere else, like an assisted living facility. In order to receive long-term care services and supports through ABD Medicaid, recipients need to show a need for those services and supports. If they do show a need, ABD Medicaid will provide the care, assuming they have a program that covers it. As with HCBS Waivers, ABD Medicaid long term care programs can vary by state, and some states have fewer programs and benefits than others. ABD Medicaid can sometimes be called regular Medicaid for seniors, but it shouldn’t be confused with the regular Medicaid that’s available for financially limited people of all ages.

 

Consumer Directed Care

All states offer some form of Consumer Directed Care, which gives the Medicaid Long Term Care recipient some decision-making power when it comes to their own care, but just how much power depends on the state and the Medicaid program allowing for the Consumer Direction. Some states and programs allow Medicaid recipients to hire their own family members as caregivers, including their spouse in some cases, while other states do not. Some states will provide the Medicaid recipient with their own Consumer Directed budget and let them spend it on their healthcare however they want, while other states just provide a few more options in terms of caregivers or available long term care goods.

 

Program of All-Inclusive Care for the Elderly

The Program for All-Inclusive Care for the Elderly, known as PACE, coordinates Medicaid and Medicare benefits for seniors, as well as dental, vision, dietary and day time care. PACE programs are also called Living Independence for the Elderly, or LIFE, programs. However, only 32 states and the District of Columbia offer PACE/LIFE programs as of Jan. 2024. Plus, most states that do have PACE/LIFE programs only have them in a few cities. To find out more about PACE, and see which states and cities have programs, click here.

 

Asset Limit

In order to be eligible for Medicaid Long Term Care, you must meet an asset limit. In most states in 2024, the individual asset limit is $2,000. However, the asset limit does vary greatly by state, ranging from $1,600 in Connecticut to $17,500 in Illinois to no asset limit in California. Asset limits also vary by your marital status and Medicaid Long Term Care Program. To find the asset limit in your state for your specific situation, use our Medicaid Eligibility Requirements Finder by clicking here. Or you can use the table above, click on your state and find out more information about asset limits in your state.

 

Look-Back Period

To make sure applicants don’t simply give away their assets to get under the asset limit, Medicaid uses the Look-Back Period. In most states, the Look-Back Period is 60 months (five years), which means the state officials processing your Medicaid application will look back into your financial history for the 60 months prior to the date your submitted your application. To learn more about the Look-Back Period, click here.

 

Home Equity Interest Limit

If you’re a homeowner, chances are good the value of your home would put you well over Medicaid’s asset limit. However, your home will not count toward the Medicaid asset limit in most cases. There are several scenarios that will make them home exempt, and some of them depend on the home equity interest limit in your state. Home equity value is the home’s fair market value minus any debt or mortgage on the home, and home equity interest is the percentage of that value that you own. The home equity interest in most states for 2024 is either $713,000 or $1,071,000, although there are exceptions. To find out the home equity interest limit in your state and learn how it impacts your home’s exempt or counted status, click here.

 

Retirement Accounts and Life Insurance

Many seniors who are applying for Medicaid Long Term Care have retirement accounts and life insurance policies. Both of these financial products can impact your Medicaid eligibility, but how they impact it depend on the state where you live. In some states, retirement accounts like IRAs and 401(k)s are exempt from the asset limit if they are in payout status, or if they are owned by your spouse. Life insurance policies may be exempt from the asset limit if they are under a certain face value, but that also varies by state.

 

Income Limit

In addition to an asset limit, you also need to meet an income limit when you’re applying for Medicaid Long Term Care. In most states in 2024, the income limit for Nursing Home Medicaid and Home and Community Based Services (HCBS) Waivers is $2,829/month, but there are many variations. In Illinois, it’s $1,255/month. In California, there’s no income limit for Nursing Home Medicaid and the HCBS Waivers individual income limit is $1,732/month. The Nursing Home Medicaid income limit in some states, like Maryland, is equal to or less than the average cost of nursing home care in the state. It’s also important to note that Nursing Home Medicaid recipients are required to help cover the cost of nursing home care by giving almost all of their income to the state, except for a small Personal Needs Allowance, which we’ll discuss in the next section.

For ABD Medicaid, the 2024 individual income limit ranges from $943/month to $1,751/month, depending on the state. These limits also change depending on your marital status. To find the income limit for your circumstances and location, use our Medicaid Eligibility Requirements Finder by clicking here. Or you can go back to the table above, select your state and learn more about income limits in your state.

 

Personal Needs Allowance

As mentioned above, Nursing Home Medicaid recipients have to help cover the cost of their care by giving most of their income to the state, except for a small Personal Needs Allowance. You are allowed to spend your Personal Needs Allowance on items not covered by Medicaid, like haircuts, phone bills or books. The amount of the Personal Needs Allowance varies depending on the state, ranging from $30/month in Alabama and South Carolina to $200/month in Alaska.

 

Spend Down

If you or your loved one is above Medicaid’s income or asset limit there are still strategies you can use to become eligible, and one of the most common is called “spend down.” In short, you spend your excess income or assets until the go down low enough for you to qualify. Asset spend down is fairly straightforward and is the same across most states, but that’s not the case with income spend down. Some states allow you to spend down your income using the “Medically Needy Pathway,” which means you can spend excess income on your necessary medical expenses until you reach a Medically Needy Income Limit for a given time period (usually one month or six months) and then Medicaid will cover the rest of your medical expenses, so it works like an insurance deductible. States that offer the Medically Needy Pathway have different rules and limits governing the process. The other states are known as “Income Cap” states, and they allow you to reduce your monthly income by depositing the excess in a Qualified Income Trust (also known as a Miller Trust) until you reach the income limit for the month. To learn more about Medicaid spend down, click here.

 

Spousal Protections

When only one spouse in a married couple is applying for Medicaid Long Term Care, there are rules that allow the non-applicant spouse (also known as the community spouse or the well spouse) to keep extra assets or income so they do not have to live in poverty. The transfer of extra assets is regulated by the Community Spouse Resource Allowance, which allows the Medicaid applicant/recipient to transfer as much as $154,140 in assets to their spouse (as of 2024), but that amount varies by state and financial situation, and it changes every year. The transfer of extra income is regulated by the Minimum Monthly Maintenance Needs Allowance, which allows the Medicaid applicant/recipient to transfer as much as $3,853.50/month in income to their spouse, but that amount varies by state, financial situation and living situation, and it also changes every year.

 

Level of Care Criteria

In addition to financial criteria, there’s also medical or functional criteria Medicaid Long Term Applicants need to meet, and this medical criteria can also vary depending on the state. Nursing Home Medicaid applicants in all states must need a Nursing Facility Level of Care (NFLOC), but how that is quantified and measured can change from state to state. For example, one state might specify that needing help with two of the five Activities of Daily Living (mobility, bathing, dressing, eating, toileting) represents a NFLOC, while other states might require you to need help with three of the five to receive a NFLOC designation.

Most HCBS Waivers programs also require a NFLOC, so the same variations apply, but some HCBS Waivers have less strict requirements.

ABD Medicaid has no level of care requirement to be admitted to the program and receive healthcare coverage, but ABD Medicaid applicants/recipients who want long term care services and supports must show a medical need for those services and supports. The level of that need can vary depending on the state and the services and supports.

 

Medicaid Estate Recovery

All states are required to try and collect reimbursement for Medicaid coverage after the Medicaid recipient dies. States do this through their Medicaid Estate Recovery Programs (MERPs). The rules and procedures of these MERPs vary greatly by state, perhaps more than any other aspect of Medicaid. Some states only attempt recovery from assets that go through probate (the process of distributing the deceased’s estate through their last will and testament). Other states, known as Expanded Recovery states, will go after assets that are outside of probate. Some states offer wide-ranging exemptions and undue hardship waivers that allow survivors to keep assets, while other states only offer limited exceptions. There are also variations in statutes of limitations, the use of liens, recovery from homes and recovery from spouses. To learn more about Medicaid Estate Recovery, click here.

 

 

Moving to Another State to Become Eligible

 Attention: Families should be aware that in moving an elderly loved one on Medicaid from one state to another, that individual may not be qualified for Medicaid from a medical need perspective in their new state of residence.

Applying for Medicaid in a state in which you don’t currently reside (or more accurately in a state to which you just moved) has become an approach to gaining eligibility. As discussed above, some states are more lenient from a financial perspective. Other states have a shorter Look-Back Period, so persons having made certain large financial transactions might be ineligible in one state but not in another. Of course, families will often make the move for non-financial reasons. Most obviously to be nearer to other family members such as their children or to live in a milder climate. The important thing is to be aware that just because someone qualifies for Medicaid Long Term Care in one state does not mean they will automatically qualify in another. Furthermore, to even apply in the new state of residence one must disenroll from the Medicaid program in their old state of residence.