Application Process for Medicaid Home and Community Based Services (HCBS) Waivers

Medicaid Long Term Care will pay for a nursing home for eligible applicants, but there are also programs, called waivers, that cover personal and medical care for low-income Americans who have similar health issues but want to remain in their own home or assisted living community. Applying to receive these Home and Community Based Services (HCBS) waivers can be challenging, but if you take the time to organize and follow the process correctly, waivers will provide equipment and services to keep you or your loved one living as independently as possible.



Step 1: Pick the Medicaid Waiver That Fits Best

Medicaid Waivers are state-specific and most states have multiple waivers. These waivers are designed for different target groups, but typically there are several waivers in any one state that are relevant to help people who are older or have chronic illnesses. It takes some work to determine eligibility (see steps 2 and 3 below), but one will first want to identify the specific waiver program that suits the needs of the person. Individual states have flexibility to create and experiment with waivers.

The services that may be paid for through HCBS waivers include:

– Case management
– Home and vehicle modifications
– Help with activities of daily living (ADLs)
– Adult day care
– Respite care
– Medical equipment
– Hot meal delivery
– Transition assistance out of a nursing home

But, again, state Medicaid waivers vary widely, so you’ll want to investigate options. Click here for a list of Medicaid waivers in every state, and spend some time determining which is best for you or your loved one.

 Medicaid waivers are not an entitlement, which means there are usually a capped or limited number of waivers the state can give to people who qualify. Unfortunately, after the limit is reached, eligible applicants are placed on a waiting list for services.


Step 2: Gather Eligibility Criteria for Medicaid Waivers

The eligibility criteria for Medicaid HCBS waivers will vary by state and can be complex, but the basic rule is that waivers are for state residents who qualify two ways: functionally (meaning they have a medical need) and financially (meaning they have limited financial resources). On the application for Medicaid waivers, in other words, one needs to show that the applicant is both functionally and financially eligible.

For the most part, the eligibility criteria for a waiver matches that for a nursing home. However, this is not always the case. Some waivers have requirements that differ from nursing home requirements. For example, California offers the Medi-Cal Assisted Living Waiver. The functional need requirements match that for nursing home care, but the waiver is only available in certain counties. Anyone in California can apply, but a requirement is that they move to an assisted living residence in one of the counties where the waiver is offered.

 The easiest way to determine eligibility requirements for a state waiver is to use our Medicaid Eligibility Requirements Finder tool. Answering a few quick questions will provide you with the financial and functional need requirements specific to your family location and situation. Start here.

Functional eligibility: Typically, to be functionally eligible for a waiver, one must require a “nursing facility level of care” (NFLOC). However, this does not mean this individual can only reside in a nursing home. NFLOC can be provided outside of a nursing home. It can even be provided in an assisted living residence. Usually, this just requires a bit more assistance than the residence can provide. Another term for someone who would probably be eligible for Medicaid waivers is “at risk for nursing home placement.” What exactly “at risk” means will vary depending on your state.

Financially Eligibility: Someone is financially qualified for Medicaid waivers if their income is below a certain amount per month (in most states the figure was $2,523 in 2022) and the value of their assets is also below a specific threshold (usually $2,000 in 2022). There is a lot of nuance and wiggle room with financial qualifications for Medicaid, however, especially when it comes to assets. State of residence, home ownership, marital status, and more are all factored into determining financial eligibility, and the limits change annually.

Once the financial and functional requirements for a waiver have been gathered, an applicant should examine the specific waiver documentation to establish if there are any additional requirements such as location or a specific disease.

If someone does not meet the financial eligibility standards, this might not mean they can’t get Medicaid. There are strategies to help an ineligible person to become eligible. See the Applicant is Financially Ineligible section below.


Step 3: Assess Functional (Medical) Eligibility for Medicaid Waivers

Someone is functionally eligible for Medicaid HCBS waivers if they need nursing-home-level care but can remain in their own home (this is also called “aging in place”) with the help of benefits offered through a particular waiver. Another way to say this is that someone is eligible for HCBS waivers if they would need to live in a nursing home without the benefits the waiver provides. Maybe they need home upgrades like grab bars and wheelchair ramps, or recurring help from a medical professional with activities of daily living like bathing. The exact eligibility requirements are different in every state, but applicants need to prove that they are medically qualified.

To determine whether someone is Medically qualified, a detailed report from a doctor on care needs, or a diagnosis of chronic illness, may be required. Also, many state Medicaid programs will send a healthcare professional to the applicant’s home to make a needs assessment. Among the factors assessed are how many Activities of Daily Living the person cannot do on their own.

The bottom line is the applicant must show they require a certain level of care, and how they demonstrate it when they apply will differ depending on the state.


Step 4: Assess Financial Eligibility for Medicaid Waivers

Assessing Income
Gathering the required information to prove financial eligibility for Medicaid waivers is the job of the applicant or their family members, and this can be a time-consuming process. (You can get help from Medicaid planners. For more, see below.)

Proving income for Medicaid might require some or all the following documents from the applicant:
– Current pay stubs
– Benefit verification letter for Social Security, Supplemental Security Income (SSI), retirement, disability, or Medicare
– Pension statement
– Alimony checks
– Dividend checks
– Signed letter from family members providing financial support
– Income tax return

Again, the required documents will be different depending on which state you live in, but you need to be able to prove monthly income. Another option, if you cannot provide the documents described above, is to ask your state Medicaid office for a Self-Declaration of Income form.

Married applicants do not need to combine their income with the spouse’s income when applying for Medicaid benefits. However, it may be required that a spouse document their income as well.

Assessing Assets
Assessing assets is more difficult and complicated than assessing income for your Medicaid application. Married couples’ assets are combined, unlike income. The state Medicaid office will consider the applicant’s “countable assets” when processing the application. Countable assets are “liquid,” meaning they can be quickly turned to cash. These include money in someone’s bank account, stocks, bonds, and CDs or certificates of deposit. Vacation properties are also considered countable assets.

“Exempt assets” do not count toward the asset limit, and include the primary home, vehicles, clothes, furniture, appliances, and funeral and burial trusts. Low-value life insurance policies are also exempted by Medicaid.

Some or all of the following documents that show the value of a person’s assets will be part of the application for Medicaid waivers:
– Checking, credit unions, savings, and CD account statements
– Life insurance policies
– Deeds or appraisals of the home and any other properties
– Copies of stocks and bonds
– Copies of annuities, IRAs, 401(k) retirement accounts
– Deeds for burial plots and receipts for prepaid funerals

How you proceed after gathering these materials depends on whether or not the applicant is financially eligible.


Step 5a: Applicant is Financially Eligible for Medicaid Waivers

If the applicant is financially eligible, proceed to Step 6a.

Step 6a: Have a Professional, Informal Eligibility Assessment

Unless it’s very obvious that the applicant is financially eligible, and remember eligibility is complex no matter which state you live in, you’ll want to confirm that the applicant qualifies before submitting an application to your local Medicaid office. Any mistake could result in a denial, and getting the application right the first time is much easier than appealing a denial.

A source for confirmation could be a benefits counselor at your local Area Agency on Aging. AAA offices exist to offer free help with issues like benefits for older adults, and they will be experts on your specific state’s requirements. The downside of AAA offices is that they might be too busy to help as soon as you’d like. To find your local AAA office, click here.

You could also get help confirming Medicaid eligibility from a Certified Medicaid Planner. These are different from AAA services because they are paid services, but Medicaid planners will usually offer an initial consultation for free. To find a nearby Medicaid planner, click here.


Step 5b: Applicant is Financially Ineligible for Medicaid Waivers

If you gather the needed information and find that the applicant is above the income or asset limits, there may still be a way to get Medicaid waivers. Someone over the eligibility limits can find strategies to receive Medicaid waivers anyway.


Step 6b: Investigate Alternate Pathways to Eligibility

Medically Needy Medicaid Waivers
Available in 36 states and Washington, D.C., Medically Needy Medicaid is for people whose income is above the Medicaid limit but they regularly spend a large amount on care costs. In other words, an applicant becomes eligible for Medically Needy Medicaid Waivers if they spend a significant percentage of their income on healthcare. State Medicaid offices will look at an applicant’s finances over a set amount of time (for example, 3 or 6 months) compared to what they spend on care, and determine whether they can reasonably afford these costs or should receive financial help.

Miller Trusts or Qualified Income Trusts
Miller Trusts or Qualified Income Trusts (QITs) are often complex but would be described basically as special accounts for depositing income that puts the Medicaid applicant above the asset limit. Money in these trusts does not count toward eligibility, but it must be managed by someone other than the Medicaid recipient and can be used to pay for medical expenses not covered by Medicaid benefits. Miller Trusts and QITs are not allowed in every state.

“Spending Down” and Look Back Periods
An applicant who is over the asset limit has the option to “spend down” their assets on healthcare costs in order to become eligible, but there are rules about how this must be done. Spending down does not mean quickly dumping money to get assets underneath the limit, because states have look back periods (usually five years) allowing Medicaid offices to review finances over that amount of time.

Some of the allowable options for “spending down” include:
– The purchase of an irrevocable funeral expense trust
– Medicaid compliant annuities
– Transferring ownership of property through a ladybird deed or enhanced life estate deed
– Medicaid Asset Protection Trusts
– “Half a loaf” gifting strategies

Again, the rules for spending down can vary widely depending on your state. Because of the nuances when it comes to Medicaid rules for eligibility, anyone who is over the income or asset limits but wants to qualify for Medicaid HCBS waivers is advised to pay for the services of a Medicaid planner.

Medicaid Planning
Medicaid planning is particularly useful for people who have a complicated marriage situation, or have assets worth significantly more than their state’s asset limit.

Certified Medicaid planners are experts at determining whether a person’s income and assets make them unqualified for Medicaid benefits including HCBS waivers. And once they’ve assessed your financials, a Medicaid planner can advise the right strategies for getting under the limits. If you hire a Medicaid planner, you should expect that your application for Medicaid waivers has a good chance of being approved.

Elder law attorneys are another type of expert who can help applicants having trouble with income or asset limits figure out how to receive Medicaid benefits, and they are licensed to establish the trusts described above that can get someone under the income or asset limits for Medicaid. Elder law attorneys are expensive, charging hundreds of dollars per hour, but they are incentivized to get your application approved, and the costs might still be much lower than what you would pay for medical services without the Medicaid waiver.


Step 7: Complete and Submit the Application for a Medicaid Waiver

Because there are so many types of Medicaid, you should find your local Medicaid office at this link, and then find the application for the specific “eligibility group” you want to apply under—in this case it’s likely the Home and Community Based Services waiver, also known sometimes as 1915(c) waivers.

In most states an application can be submitted three ways: in person, by traditional mail, or online. Applying online is generally faster than submitting physical documents through the mail or in person.


Step 8: Awaiting Approval and Waitlists for Medicaid Waivers

The amount of time it takes after applying to receive a response from your state Medicaid office is, by law, supposed to be 90 days or fewer. However, there is not much enforcement of this rule and you should know that it’s possible it will take longer for your application to be processed and for you to receive a response. The time between applying and receiving a confirmation or denial is called “Medicaid pending.”

One of the unfortunate issues with Medicaid waivers is that they are not considered entitlements, which means there may be an enrollment cap because the state is not obligated to provide these benefits to every eligible applicant (unlike Nursing Home Medicaid). Because an individual state can decide the maximum number of recipients for its waiver programs, even if an applicant is approved it might take a long time to receive benefits. If the program is full but the application is approved, the applicant would be placed on a waitlist that can last months or even years before the benefits come through.