How to Become Eligible for Medicaid Long Term Care Through the Medically Needy Pathway

Summary
The Medically Needy Pathway is a way for people to qualify for Medicaid Long Term Care even if they are over their Medicaid income limit. To use the Medically Needy Pathway, you or your loved must spend your monthly excess income on medical bills. The Medically Needy Pathway is not available in every state, and those states that do offer it have different rules that govern it.

 

Medically Needy Pathway Overview

The Medically Needy Pathway is for Medicaid applicants who have monthly income above their specific Medicaid income limit. It is an option in 32 states and Washington, D.C. (for full list, see below), and the rules surrounding the program can be very different depending on the state. Using the Medically Needy Pathway may also be referred to as “spending down,” because you spend your excess income on medical expenses until it goes down enough to make you eligible.

 Planning Strategy: Spending down to qualify for Medicaid is a common strategy, but most enough it involves spending down assets. However, the Medically Needy Pathway allows one to spend down income. To learn more about Medicaid asset spend down, click here.

The Medically Needy Pathway has different names in different states. In New York, for example, it’s called the Medicaid Excess Income Program. In Illinois, it’s called the Medical Spenddown Program.

How Does the Medically Needy Pathway Work?

In states where the Medically Needy Pathway is available for applicants above the Medicaid income limit, you must “spend down” your excess income on medical bills in order to qualify for Medicaid as an applicant and to maintain your eligibility as a Medicaid Long Term Care recipient. The amount of income you need to spend down (also known as a spend down amount) is determined using your income and your state’s Medically Needy Income Limit (MNIL). In short, your spend down amount is your income minus the MNIL.

Each state also has a spend down period which can be anywhere from 1-6 months. You must meet your spend down amount each spend down period to be eligible for Medicaid. So, it works like an insurance deductible. After you meet the spend down amount during the spend down period, Medicaid will kick in and start covering expenses.

 Did You Know? Medicaid beneficiaries who also have Medicare, which is known as being “dual eligible,” can count their Medicare premium payments toward their Medically Needy Pathway spend down amount, depending on the state.

Example

Here is an example of when the Medically Needy Pathway might work for a Medicaid applicant who is over the income limit:

In California, the MNIL is $600/month for an individual, and the spend down period is one month. Jane has $2,100/month in income. So, her spend down amount would be $1,500 ($1,100 income – $600 MNIL). Once Jane spends $1,500 on Medicaid-allowed healthcare expenses, Medicaid will cover her expenses for the rest of the 1-month spend down period. When that month ends, the process starts again and Jane will have to meet her $1,500 spend down amount again.

For a full list of states’ Medically Needy Income Limits, see below.

 

For Which Types of Long Term Care Does Medically Needy Medicaid Apply?

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

In states that offer the Medically Needy Pathway (complete list below), it can always be used with ABD Medicaid. But not all of those states offer it in conjunction with Nursing Home Medicaid or HCBS Waivers. To find out the rules in your state, you can contact your local Medicaid agency, or use our 50-state guide to go to your state’s page. The information will be in the “Qualifying with Medicaid Planning” section.

As of 2025, the following states offer a Medically Needy Pathway: Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Pennsylvania, Rhode Island, Utah, Vermont, Virginia, Washington, West Virginia and Wisconsin, as well as the District of Columbia.

The income limits in these states can vary, and those limits can also vary depending on the type of Medicaid Long Term Care. In general, however, the 2025 income limit for Nursing Home Medicaid and HCBS Waivers is $2,901/month for an individual and $5,802/month combined for a couple with both spouses applying. When only one spouse is applying to either of those programs, the income limit of the non-applicant spouse is not counted and the income limit (in most states in 2025) for the applicant is $2,901/month.

For ABD Medicaid, the 2025 income limit in most states ranges from $967/month to $1,795/month, and for a couple (whether one or both spouses is applying) it’s $1,450/month to $2,658/month, depending on the state.

Remember, if you are above these income limits and live in a state that offers it, you can use the Medically Needy Pathway to reduce your income and help you become Medicaid eligible. But you don’t spend down to these limits with the Medically Needy Pathway, you have to spend down to your specific Medically Needy Income Limit.

 Toolbox: To find the income limit for your specific situation, you can use our Medicaid Eligibility Requirements Finder. If you are over your financial limits, or have complex finances, consult with a professional like a Certified Medicaid Planner or an Elder Law Attorney.

 

What Are Allowable Medical Expenses for Medically Needy Spend-Down?

In every state that offers a Medically Needy Pathway, money spent on Medicare or other health insurance premiums counts as “spending down,” meaning it may be deducted from an applicant’s income when determining eligibility.

Other spend-down expenses allowed will depend on the state. Medicaid may consider any of these to be medical expenses:

  • Doctor bills
  • Hospital services
  • Prescriptions (drugs and/or equipment)
  • Nursing home services
  • Eyeglasses
  • In-home help with Activities of Daily Living (mobility, bathing, dressing, eating, toileting)
  • Portion of assisted living costs allocated for assistance with the Activities of Daily Living (may be state-dependent)
  • Therapies
  • Transportation to medical appointments

 

Medically Needy Asset Limits

In addition to an income limit, Medicaid also requires applicants to meet an asset limit. In most states in 2025, the individual asset limit is $2,000, but this can vary by state, Medicaid Long Term Care program and the applicant’s marital status. Some states adjust their asset limits for seniors who use the Medically Needy Pathway, while others do not.

 

How to Apply for the Medically Needy Pathway to Eligibility

Someone who wants to use the Medically Needy Pathway to gain and maintain Medicaid eligibility will need to indicate that in their Medicaid Long Term Care application. For more details on the application and how to indicate you need to use the Medically Needy Pathway, contact your local Medicaid office. Or you can consult with a professional.

In order to apply for the Medically Needy Pathway, you will need the following documentation to prove medical expenses:

  • Medical bills
  • Medical receipts
  • Cancelled checks that paid bills

 

Medically Needy Income Limits by State

Medically Needy Income Limits for Medicaid Long Term Care Eligibility as of Jan. 2025
State Individual Couple
Arkansas $108.33 $216.66
California $600 $934
Connecticut $803 $1,090
District of Columbia $809.08 $851.67
Florida $180 $241
Georgia $317 $375
Hawaii $469 $632
Illinois $1,255 $1,703
Iowa $483 $483
Kansas $475 $475
Kentucky $235 $291
Louisiana (may vary depending on region) $100 $192
Maine $315 $341
Maryland $350 $392
Massachusetts $522 $650
Michigan $1,255 $1,703
Minnesota $1,255 $1,704
Missouri $1,067 $1,448
Montana $525 $525
Nebraska $392 $392
New Hampshire $888 $1,033
New Jersey $367 $434
New York $1,732 $2,351
North Carolina $242 $317
North Dakota $1,130 $1,533
Pennsylvania $425 $442
Rhode Island $1,133 $1,175
Utah $1,255 $1,704
Vermont (may vary depending on region) $1,333 $1,333
Virginia (may vary depending on region) $401.69 $511.35
Washington $967 $967
West Virginia $200 $275
Wisconsin $1,255 $1,703.33

 

Medically Needy Spend Down Periods by State

Medically Needy Spend Down Periods as of Jan. 2025
State Spend Down Period
Arkansas 3 months
California 1 month
Connecticut 6 months
District of Columbia 6 months
Florida 1 month
Georgia 6 months
Hawaii 1 month
Illinois 1 month
Iowa 2 months
Kansas 6 months
Kentucky 3 months
Louisiana 3 months
Maine 6 months
Maryland 6 months
Massachusetts 6 months
Michigan 1 month
Minnesota 6 months
Missouri 1 month
Montana 1 month
Nebraska 1 month
New Hampshire 1 or 6 months
New Jersey 6 months
New York 1 month
North Carolina 6 months
North Dakota 1 month
Pennsylvania 6 months
Rhode Island 6 months
Utah 1 month
Vermont 1-6 months
Virginia 1-6 months
Washington 3 or 6 months
West Virginia 6 months
Wisconsin 6 months

 

 

 

Medically Needy Asset Limits by State

Medically Needy Asset Limits (first figures is for an individual, second figure for a couple) as of Jan. 2025
State Medically Needy Asset Limits
Arkansas $2,000/$3,000
California N/A
Connecticut $1,600/$2,400
District of Columbia $4,000/$6,000
Florida $5,000/$6,000
Georgia $2,000/$4,000
Hawaii $2,000/$3,000
Illinois $17,500/$17,500
Iowa $10,000/household
Kansas $2,000/$3,000
Kentucky $2,000/$4,000
Louisiana $2,000/$3,000
Maine $2,000/$3,000
Maryland $2,500/$3,000
Massachusetts $2,000/$3,000
Michigan $2,000/$3,000
Minnesota $3,000/$6,000
Missouri $5,909.25/$11,818.45
Montana $2,000/$3,000
Nebraska $4,000/$6,000
New Hampshire $2,500/$4,000
New Jersey $4,000/$6,000
New York $31,175/$42,312
North Carolina $2,000/$3,000
North Dakota $3,000/$6,000
Pennsylvania $2,400/$3,200
Rhode Island $4,000/$6,000
Utah $2,000/$3,000
Vermont $2,000/$3,000
Virginia $2,000/$3,000
Washington $2,000/$3,000
West Virginia $2,000/$3,000
Wisconsin $2,000/$3,000