How to Apply for Nursing Home Medicaid Long Term Care

Summary
When seniors apply for Nursing Home Medicaid, which covers all standard nursing home expenses, they need to prove they meet Medicaid’s financial and medical requirements. The state will evaluate applicants to see if they meet the medical requirement, which is needing a Nursing Facility Level of Care (NFLOC). Applicants must prove they meet the financial requirements with documents, but even if they are over Medicaid’s asset or income limit, there are still ways to become eligible before applying.

Step 1: Assess Medical Eligibility

Applicants must require a Nursing Facility Level of Care (NFLOC) to qualify for Nursing Home Medicaid, but the definition of NFLOC varies from state to state. In most cases, it depends on the applicant’s ability to complete the Activities of Daily Living:

1. Mobility (the ability to move in and out beds and chairs and from room to room)
2. Bathing (includes grooming, like combing hair and brushing teeth)
3. Dressing
4. Eating
5. Toileting

In some states, a senior who needs help with two of the five Activities of Daily Living might be considered to need a NFLOC, while in other states they would need help with three of the five to meet the criteria. Behavior is taken into consideration in some states when it comes to determining level of care need, as are cognitive issues. However, a diagnosis of Alzheimer’s disease or other dementia does not automatically designate a senior as needing a NFLOC. To find your state’s NFLOC definition, contact your state Medicaid offices by using the “Contact Your State Medicaid Agency” tool on this official Medicaid.gov webpage.

If you or your loved one meet the medical (also called functional) criteria for Nursing Home Medicaid, you can move to Step 2: Assess Financial Eligibility and Gather Financial Documents. Even if you don’t meet the medical criteria, you can still move to Step 2 and see if you meet the financial requirements. If you don’t meet those requirements either, there are strategies that can help you become financially eligible that are best used if you start planning well ahead of time – like before you meet the medical requirements. So, you could start one of those (like a Medicaid Asset Protection Trust), and by the time you meet the medical requirements you will also meet the financial requirements.

Step 2: Assess Financial Eligibility and Gather Financial Documents

To know if they’re financially eligible for Nursing Home Medicaid, seniors first need to find the specific asset limit and income limit for their particular situation. In most states in 2024, the individual asset limit for Nursing Home Medicaid is $2,000. This means the total value of an applicant’s countable assets must be $2,000 or less. Countable assets include banks accounts, retirement accounts, stocks, cash, second homes or vehicles and luxury items. Some assets are exempt (not countable), such as clothes, wedding rings, primary vehicles, household furniture and appliances and, in most cases, the applicant’s home. So the second part of determining financial eligibility is adding up all the countable assets and seeing if the total meets the asset limit.

The same process is followed when it comes to income. The individual income limit for Nursing Home Medicaid in most states in 2024 is $2,829/month. Almost all income is counted toward the limit, like Social Security benefits, pension payments, retirement account payouts, salary, rental income and alimony. It should also be noted that Nursing Home Medicaid beneficiaries are required to give almost all of their income to the state to help cover the cost of care, with the exception of a small, monthly “personal needs allowance.”

Medicaid’s asset and income limits can vary by state, the applicant’s marital status and if their spouse is also applying for Medicaid. To find the specific financial criteria for your situation, use our Medicaid Eligibility Requirements Finder by clicking here.

As you’re evaluating your finances, you should also be gathering official documents to verify your financial situation. These documents will be submitted along with your application, and the burden of proof is on you to show that you meet your financial limits. In most cases, you will need to document your finances going back five years from the date of your application due to Medicaid’s Look-Back Period.

Gathering the correct financial documents is often the most time-consuming part of the application process. Applicants should start requesting and collecting these documents as soon as possible. They might include:

• Bank records
• Retirement account statements
• Life insurance policies
• Final statements for all closed financial accounts
• Deeds for all homes and land owned by the applicant
• Titles to vehicles owned by the applicant
• Benefit letters for Social Security, Supplemental Security Income (SSI), disability payments, etc.
• Pension statements
• Alimony checks
• Dividend checks
• Income tax return
• Up-to-date pay stubs

Step 3: Pick Your Path – Apply or Plan

If you believe you are financially eligible for Nursing Home Medicaid, go to Step 5: Complete and Submit Your Application.

If you believe you are over the financial limits, there are still ways you can qualify for Nursing Home Medicaid, so go to Step 4: Alternative Pathways to Eligibility.

Step 4: Alternative Pathways to Eligibility

Even if applicants don’t meet the financial limits for Nursing Home Medicaid, there are still methods they can use to reduce their countable resources and become eligible. These strategies can be complex, just like Medicaid’s rules, so we recommend consulting with a professional like an Elder Law Attorney or a Certified Medicaid Planner before attempting them on your own.

Strategies for Excess Income
Nursing Home Medicaid applicants can reduce their income to meet their limit using one of two methods and depending on where they live – the Medically Needy Pathway or a Qualified Income Trust. Nursing Home Medicaid applicants and beneficiaries who live in states that offer the Medically Needy Pathway can spend excess income on unpaid medical bills to become eligible. Nursing Home Medicaid applicants and beneficiaries who live in Income Cap States can become eligible by depositing their excess income into a Qualified Income Trust.

As of 2024, the Income Cap states are Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Idaho, Indiana, Iowa, Kentucky, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Texas and Wyoming. If your state is not on this list, it offers a Medically Needy Pathway.

Strategies for Excess Assets
Applicants have numerous options when it comes to reducing their assets and meeting their Nursing Home Medicaid asset limit. Click on any of the underlined items in the list below to learn more about them.

• Spend Down – Many applicants “spend down” assets to reduce them and meet the limit. They can spend on most anything, as long as it’s not for someone other than themselves or their spouse.
• Medicaid Compliant Annuities – Annuities, which are usually sold by insurance companies, will turn a lump sum of cash into a monthly income stream. As long as the annuity complies with Medicaid rules, its value won’t count toward the asset limit, but the income stream will count toward the income limit.
• Irrevocable Funeral Trusts – Nursing Home Medicaid applicants can reduce their assets by buying one of these trusts. Its value won’t count against the asset limit, up to a point, which is $15,000 in most states. And the money in the trust will eventually be used to pay for the applicant’s funeral and burial expenses.
• Medicaid Asset Protection Trusts – Assets in a Medicaid Asset Protection Trust are exempt from the asset limit. These trusts violate the Look-Back Period, so for them to be useful to applicants in most states they must be created at least five years before the Nursing Home Medicaid application will be submitted. They’re also expensive to establish, so they’re not recommended for anyone with less than about $100,000 in assets.

Step 5: Complete and Submit Your Application for Nursing Home Medicaid

There are numerous types of Medicaid applications, so the first part of this step is finding the application for Nursing Home Medicaid in your state. The application can be digital and completed and submitted online, or it can be paper and submitted in person or by mail. To find the right application form for Nursing Home Medicaid, you can reach out to your local Medicaid office by using the “Contact Your State Medicaid Agency” tool on this official Medicaid.gov webpage.

Before submitting the application, find a qualified person to check it over, especially the calculations and documents concerning financial eligibility. It’s easy to make mistakes on a Medicaid Long Term Care application, but they will probably lead to a denial, and applying correctly the first time is less time-consuming than appealing a denial. A local Area Agency on Aging may have staff that will check Medicaid applications. The state Medicaid office might also offer this service. Or applicants can contact a professional like a Certified Medicaid Planner or an Elder Law Attorney.

Step 6: Wait for Approval and Find a Nursing Home

By law, Medicaid state offices should approve or deny an application within 90 days. However, extensions are often allowed and it can take longer than 90 days for the state to reply. The time between submitting an application and getting a reply is known as “Medicaid Pending.” Some nursing homes may be willing to accept seniors who have Medicaid Pending status without getting paid immediately. These facilities are assuming the senior will be approved for Medicaid and the state will retroactively pay for the nursing home bills once the senior is approved, which is what happens with Medicaid Pending. However, if the senior is denied Nursing Home Medicaid, they will be responsible for paying for their unpaid bills.

As mentioned above, Nursing Home Medicaid is an entitlement, meaning all eligible applicants are guaranteed by law to receive benefits without wait. But that doesn’t mean they are guaranteed a bed in any nursing home they choose. Most nursing homes accept Medicaid, but not all, and those that do may not have any available spaces when you or your loved one needs one. To find and compare nursing homes near you that accept Medicaid, you can use Nursing Home Compare. It’s a searchable database of more than 15,000 nursing homes across the country. It’s run by the Centers for Medicare & Medicaid Services and it can be filtered by overall rating, staffing, health inspections and whether or not the facility accepts Medicaid.