Overview of Eligibility Requirements for Medicaid Long-Term Care
Summary
Medicaid Long Term Care eligibility is a complicated topic because the requirements are different in every state, they are updated annually or biannually, and there are three types of Medicaid programs that provide long term care and each of these has different eligibility criteria. Furthermore, the requirements are also dependent on the marital status of the applicant and whether a spouse will also be applying for Medicaid. While this page provides an overview, the easiest way to find information specific to your situation is to use our Medicaid Eligibility Requirements Finder tool.
Table of Contents
Last Updated: Feb 12, 2022Medicaid Eligibility Requirements
There are three types of Medicaid programs that offer long term care. These are Institutional Nursing Home Medicaid, Home and community-Based Services (HCBS) Medicaid Waivers and Aged, Blind and Disabled (ABD) Medicaid. Regardless of the type of Medicaid, all programs consider two major factors: financial need and medical need. However, the financial requirements and the medical need criteria vary with the type of Medicaid program.
Financial Criteria
Three factors are considered when determining if an applicant is financially qualified for Medicaid long term care; 1) their income, 2) their assets and 3) the value of their home equity. However, each of the three types of Medicaid Long Term Care program has different values for these limits. Furthermore, the limits change based if an applicant is married or single and if one or both spouses are applying for Medicaid assistance.
The reason that different Medicaid programs have different values is that different Medicaid programs provide assistance in different locations. Persons residing in a nursing home have very different financial needs than individuals living at home.
The reason the values change based on marital status and number of applicants is because one’s financial needs change based on their marital status. For example, a single widower in a nursing home has very different monetary needs than a married couple in which one spouse resides in an Alzheimer’s care home while the other spouse lives independently in the couple’s long-time home.
Income Rules
Married couples’ incomes are counted separately provided both spouses are not applying for Medicaid. If only one spouse is an applicant or if the applicant is single, only their income is counted. The following sources are considered income.
– Alimony
– Dividends from bonds and stocks
– Employment wages
– Estate income
– Interest payments
– IRA distributions
– Pension payments
– Social Security benefits
– Veteran’s benefits (varies by state)
For all types of Medicaid, applicants are permitted a monthly income. Across state and across Medicaid program, these figures vary. A rule of thumb is that the monthly income limit is between 100% and 300% of the federal poverty level. For 2022, this means single applicants must earn less than $841 / month or $2,523 / month. For specific numbers, use our Medicaid Eligibility Requirements Finder.
For married couples, a non-applicant spouse may be allocated some of the applicant’s income so they can continue living in the home. This is called the Minimum Monthly Maintenance Needs Allowance (MMMNA). In 2022, most states permit a maximum of $3,435 per month to be allocated to a non-applicant spouse.
Asset Rules
In most cases, all of a married couple’s assets are considered joint assets. This is true for a home (more on home equity below) or any asset regardless of in whose name the asset is held. There are Exempt and Non-Exempt Assets. The following assets are counted (non-exempt).
– Cash
– Certificates of deposit
– Stocks & bonds
– Vacation properties
– Any other liquid assets that can be easily converted to cash.
Assets not counted include a primary home (more on home exemptions below), furniture & appliances, clothing, a car, irrevocable funeral trusts, and life insurance policies (with a face value under $1,500 in most states).
For most types of Medicaid long term care, single applicants are permitted countable assets valued up to $2,000. However, this varies by state. In no state is a single applicant permitted more than $20,000. Married couples who are both applying are permitted between $4,000 and $23,400 depending on their state of residence. The rules for vary married couples in which only one spouse is seeking Medicaid get very complicated, very quickly. The non-applicant spouse is permitted to retain a much larger sum, as much as $137,400 in 2022. However, this is situation- and state-dependent. Again, we recommend using the Medicaid Eligibility Requirements Finder.
Home Equity Rules
In most cases, in most states, homes are exempt up to a specific value (which changes annually and by state). The value is calculated by owner’s equity, not the market value of the home. Generally speaking, if at least one spouse of a married couple lives in the home, the home is exempt regardless of its value. Or if a single homeowner is temporarily in a nursing home and intends to return to the home, the home may be exempt.
In other cases in 2022, in all states (except California), homes are exempt up to a home equity value of $636,000 or $955,000. These vary based on the real-estate values in specific states. Accordingly, California has no upper limit on a home’s value given the very high cost of real estate in California.
Medical Criteria
The medical eligibility for Medicaid Long Term Care depends on the Medicaid program for which they are applying. As a reminder, there are three types of Medicaid long term programs: Nursing Home Medicaid, Home and community-Based Services (HCBS) Medicaid Waivers, and Aged, Blind and Disabled Medicaid.
Nursing Home Medicaid and HCBS Waivers both require a Nursing Facility Level of Care (NFLOC). The definition of which is different in every state. NFLOC is determined by assessing their mental and physical health, plus their need for skilled nursing or rehabilitative care. An important part of determining NFLOC is an assessment of the individual’s ability to complete the five activities of daily living (ADL) independently. These are mobility, dressing, eating, personal hygiene and toileting. Failure to perform two or three ADLs independently is often seen as a strong indicator of the need for a NFLOC. However, this is not consistent across the 50 states.
A medical doctor must review and approve the NHLOC designation. A face-to-face functional assessment of the applicant is required to determine NFLOC. Functional assessments are repeated every 12 months to ensure that the recipient continues to meet the state’s NFLOC. The applicant does not pay for the functional assessment because it’s part of the Medicaid application process.
ABD Medicaid LTC only requires that the person is over age 65, or blind, or disabled. They do not require any medical need to be approved for the program. However, to be approved for specific benefits or services, they must be approved similar to the way a pre-authorization works with traditional health insurance.
2022 Medicaid Long Term Care Eligibility Criteria Table
| Medicaid Eligibility Requirement by Type of Medicaid Long Term Care Program | |||||
| Type of Medicaid | Marital Status / # of Applicants | Monthly Income Limit | Countable Asset Limits | Home Equity Limit | Medical Criteria |
| Nursing Home Medicaid | Single | Approximately $2,500 | $2,000 – $20,000 | $636,000 or $955,000 | Nursing Facility Level of Care |
| Married w/1 Applicant | Approximately $2,500 for the applicant | $2,000 – $20,000 for the applicant. Up to $137,400 for the non-applicant. | $636,000, $955,000 or exempt if owner-occupied | Nursing Facility Level of Care | |
| Married w/2 Applicants | Approximately $5,000 | $3,000 – $24,000 | $636,000 or $955,000 | Nursing Facility Level of Care | |
| HCBS Waivers | Single | Approximately $2,500 | $2,000 – $20,000 | $636,000, $955,000 or exempt if owner-occupied | Nursing Facility Level of Care |
| Married w/1 Applicant | Approximately $2,500 for the applicant | $2,000 – $20,000 for the applicant. Up to $137,400 for the non-applicant. | $636,000, $955,000 or exempt if owner-occupied | Nursing Facility Level of Care | |
| Married w/2 Applicants | Approximately $5,000 | $3,000 – $24,000 | $636,000, $955,000 or exempt if owner-occupied | Nursing Facility Level of Care | |
| ABD / Regular Medicaid | Single | Approximately $841 | $2,000 – $20,000 | Exempt if owner-occupied | No Care Requirement |
| Married w/1 Applicant | Approximately $1,261 | $3,000 – $24,000 | Exempt if owner-occupied | No Care Requirement | |
| Married w/2 Applicants | Approximately $1,261 | $3,000 – $24,000 | Exempt if owner-occupied | No Care Requirement | |
Ways to Become Medicaid Eligible When Exceeding the Limits
If you meet Medicaid’s medical criteria, but your income and / or assets exceed Medicaid’s financial limits, there may be other ways you can qualify for Medicaid LTC.
For those with high medical costs that exceed their income, you may be deemed Medicaid-eligible if your state offers a Medically Needy Pathway. About 60% of states offer this program. If you spend a lot of your income on LTC, Medicaid can deduct those costs from your income. If the remaining income is at or below your state’s income limit, you’re considered financially eligible, regardless of your income.
A Qualified Income Trust (QIT) allows an applicant to directly deposit into a QIT the portion of their income that exceeds Medicaid’s income limit. Excess income will no longer count toward Medicaid’s income limit. The money in the QIT must be controlled by a trustee, not the Medicaid applicant. QIT funds can only be spent for medical expenses, Medicare premiums, or LTC that are not covered by Medicaid.
Spending Down Assets, for persons who are over the asset limit can make you financially eligible eventually if you don’t violate any of Medicaid’s spend-down rules. For example, it’s not permitted to give away assets. It’s very important to get professional advice before you spend down your assets to avoid violating state rules. You will be denied Medicaid for an extended period if you violate the rules.
Working with a Medicaid planning professional can help with the above approaches and many other strategies to become Medicaid eligible.