What Happens with Medicaid Long Term Care Coverage When Moving From State to State

Medicaid Long Term Care coverage cannot be directly transferred from state to state. Instead, a Medicaid recipient who is moving out of state must end their Medicaid coverage in the state they are leaving and then reapply in their new state. The process can be complicated, but with proper research and advance planning, it is possible with minimal or no loss of coverage.


Moving Out of State With Medicaid: State Eligibility Requirements

Although Medicaid is federally funded, each state runs its own Medicaid program and eligibility requirements for Medicaid Long Term Care coverage can change from state to state. The differences in requirements prevents a simple transfer of Medicaid Long Term Care coverage – just because someone was eligible for Medicaid in one state does not mean they will be eligible for Medicaid in another state.


Financial Eligibility

Medicaid Long Term Care is intended for people with limited financial means. In order to be eligible, a person must meet an asset limit and an income limit, which can vary by state. For homeowners, the value of their home also plays a role in Medicaid eligibility. All three aspects of financial eligibility – income, assets, and home ownership – are detailed below.

 Checking State Criteria – One can check their financial eligibility criteria for any state using our Search Tool. For persons moving, check your old and new states to compare.

The individual income limit for both Nursing Home Medicaid and Home and Community Based Service (HCBS) Waivers in most states is $2,829/month (as of 2024). But that’s not the case in all states. California, for example, has no income limit for Nursing Home Medicaid, but the individual income limit for HCBS Waivers is $1,732/month from April 2024 to March 2025. In Illinois, the individual income limit for both Nursing Home Medicaid and HCBS Waivers is $1,255/month from April 2024 to March 2025, and in New York it’s $1,732/month.

The individual income limit for Aged, Blind and Disabled (ABD) Medicaid varies even more widely from state to state. It ranges from $943/month to $1,751/month, but there are exceptions.

In terms of Medicaid’s income limit for eligibility, almost all income is counted – wages, salary, alimony, IRA payments, stock dividends, Social Security benefits, pension payments, property income, etc. COVID-19 stimulus checks and Holocaust restitution payments are not considered income.

Most states have an individual asset limit of $2,000 (as of 2024) for all three types of Medicaid Long Term Care – Nursing Home Medicaid, Home and Community Based Services (HCBS) Waivers, and Aged, Blind and Disabled Medicaid. However, some states have much higher limits. In New York, it’s $31,175, and in Illinois it’s $17,500. Florida sets its Nursing Home Medicaid and HCBS Waivers individual asset limit at $2,000, but for ABD Medicaid its $5,000. In California, there is no asset limit for Medicaid Long Term Care as of Jan. 1, 2024.

These state-to-state variances in asset limit can be an issue for Medicaid beneficiaries planning to move. A person in New York, for instance, could have $30,000 in assets and be Medicaid eligible, but if they move to Florida that amount of assets would put them over the limit and make them ineligible. In order to become eligible in Florida, they would have to “spend down” $28,000 of their assets (to reach Florida’s asset limit of $2,000) in a Medicaid-approved manner.

Most assets will be counted against Medicaid’s eligibility asset limit, including cash, bank accounts, retirement accounts, second vehicles, second/vacation homes, stocks, bonds and any other financial holdings or property that can be easily converted to cash. A beneficiary’s primary home may not count against the asset limit, and those details are discussed below. Primary vehicles, and essential personal and household items like clothing, furniture and appliances, do not count against the asset limit.

Home Ownership
For Medicaid beneficiaries who own a home, its value would almost certainly put them over the asset limit if that value was counted. But the home is exempt (not counted) in the following situations:

If the Medicaid beneficiary lives in their home and the “home equity interest” is less than $713,000 or $1,071,000 (as of 2024 and depending on state) then the home will NOT be counted against the asset limit. “Home equity interest” is the portion of the home’s equity value that the applicant owns minus any outstanding mortgage/debt. States with higher average property values use the $1,071,00 limit and states with lower property values use the $713,000 figure.

If the beneficiary’s spouse, minor child, or blind or disabled child of any age lives in the home, then the home is exempt regardless of the beneficiary’s home equity interest, and regardless of where the beneficiary lives.

If none of the above-mentioned people live in the home, the home can be exempt if the beneficiary files an “intent to return” home and the home equity interest is at or below $713,000 or $1,071,000, depending on the state.

It’s important to note that the rules regarding home equity interest amounts only apply to Nursing Home Medicaid and Home and Community Based Services (HCBS) Waivers beneficiaries. Value does not matter when it comes a home’s exempt status for Aged, Blind, and Disabled (ABD) Medicaid beneficiaries.


Functional Eligibility

In addition to meeting financial requirements, many (but not all) Medicaid Long Term Care applicants are also required to meet a functional requirement. The functional (or medical) requirement is needing a Nursing Facility Level of Care. However, the definition of Nursing Facility Level of Care varies by state, which means functional requirements for eligibility vary by state.

The differences in NFLOC definitions often revolve around Activities of Daily Living (ADL). These Activities of Daily Living are usually grouped into five general categories: mobility, bathing, dressing, eating, toileting. Some states might consider a person who can only perform three or fewer ADLs as functionally eligible for Medicaid, while other states might limit eligibility to people who can only perform two or fewer ADLs. This could present a problem, for example, for a person who can perform three ADLs and is living in a state where that meets Medicaid eligibility requirements, but is then moving to a state where it does not meet requirements.

In most cases, determining NFLOC and functional eligibility also includes evaluations by physicians and other medical professionals. These will, by nature, vary somewhat from state to state and doctor to doctor, which means the functional eligibility requirements can also change.

 Attention: It’s a good idea to get the necessary medical evaluations in a potential new state done ahead of time so the Medicaid recipient can know if they will continue to be functionally eligible in their new state. If not, the high cost of private long-term healthcare might prohibit the move.


Moving Out of State With Different Types of Medicaid Long Term Care

The scope of Medicaid Long Term Care coverage also varies by state, which is another barrier to a simple transfer of Medicaid coverage for someone moving out of state. Just because Medicaid covered a long-term care service in one state doesn’t mean it will cover that same service in another state.

Each state has three basic Medicaid Long Term Care programs – Nursing Home Medicaid, Home and Community Based Services (HCBS) Waivers, and Aged, Blind, and Disabled (ABD) Medicaid.


Nursing Home Medicaid

The extent of the coverage for Nursing Home Medicaid doesn’t vary much by state – Medicaid will, essentially, cover all the expenses associated with living and receiving health care in a nursing home. So, a Nursing Home Medicaid recipient who is moving out of state can expect to receive roughly the same benefits in their new state that they were receiving in their old state, once they have canceled their Medicaid coverage in the old state and reapplied for it in the new state.

Nursing Home Medicaid recipients are required to need a Nursing Facility Level of Care (NFLOC) as their functional criteria. How this is measured and defined varies by state, so just because a senior was evaluated to need a NFLOC in one state doesn’t mean they will necessarily be evaluated to need it in another state. In general, states will test a senior’s ability to complete the Activities of Daily Living – mobility, bathing, dressing, eating and toileting – to determine level of care need. The inability to complete two of these Activities may constitute a NFLOC in one state, but it may take an inability to complete three of them to equal a NFLOC in a different state.

As discussed above, Nursing Home Medicaid recipients must also meet the financial criteria of an asset limit ($2,000 in most states for 2024) and an income limit ($2,829/month in most states for 2024). It’s important to note that Nursing Home Medicaid recipients must give most of their income to the state to help cover the cost of nursing home care. They may only keep a “personal needs allowance” (between $30-$200/month depending on state). They can also keep enough of their income to make Medicare premium payments if they are “dual eligible,” and enough to make any Medicaid-approved spousal income allowance payments to financially limited spouses who are not Medicaid applicants or recipients.

 Waiting for a “Medicaid Bed” – In addition to reapplying for Medicaid, seniors moving out of state who need Nursing Home Medicaid coverage must also find a nursing home that has open Medicaid beds. Most nursing homes accept Medicaid, but most also have seniors who pay by other means, so there are a limited number of spaces for Medicaid beneficiaries. Nursing Home Medicaid is an entitlement, which means all qualified applicants are guaranteed by law to receive benefits without wait, but that doesn’t mean they are guaranteed a space in any specific nursing home.


ABD Medicaid

The scope of Aged, Blind and Disabled (ABD) Medicaid coverage does not change much from state to state when it comes to basic healthcare coverage – doctor’s visits, prescription medication, and hospitalization. But when it comes to the long-term care benefits available through ABD Medicaid, the coverage can significantly change from state to state. First of all, seniors must show a need for long-term care benefits to receive them through Medicaid, but the level of need and how it is measured will vary by state. The programs that deliver the long-term care benefits via ABD Medicaid can also change by state – some states have similar programs, others have very different programs, and some don’t have any specific long-term care programs via ABD Medicaid.

For example, both California and Texas have a program called Community First Choice (as do several other states) that will deliver long-term care benefits to ABD Medicaid beneficiaries who require a Nursing Facility Level of Care (NFLOC). Remember, this is not a requirement for ABD Medicaid, which only requires a senior to be age 65 or older (and to meet the financial criteria) to be eligible. Both California and Texas also have programs that will provide long-term care benefits to ABD Medicaid beneficiaries who don’t require a NFLOC but need the benefits to continue living independently, but these programs have different names – it’s the Personal Care Services program in California, and the Primary Home Care program in Texas.

In Florida, there’s only one program that provides long-term care benefits to ABD Medicaid beneficiaries. It’s called Standard MEDS-AD Benefits, and state officials will evaluate Florida ABD Medicaid beneficiaries to determine what kind of long-term care services and supports they need and Standard MEDS-AD will provide. In Illinois, the only specific programs that provide long-term care benefits for ABD Medicaid beneficiaries also require them to have Medicare – Medicaid Managed Long Term Services and Supports and Medicaid-Medicare Alignment Initiative.

As mentioned earlier, individual income limits for ABD Medicaid have a wide variance across states, ranging from $943/month and $1,751/month as of 2024.  The individual asset limit for ABD Medicaid is $2,000 in most states in 2024, but there are some states with different limits. New York has a $31,175 individual asset limit for ABD Medicaid in 2024, and the limit in Illinois is $17,500.


Home and Community Based Services Waivers

Moving with Home and Community Based Services (HCBS) Waivers can also be a complex process. Let’s start by defining the word “waiver,” which means something like voucher in this instance. Think of it as a voucher that will pay for long-term care services for Medicaid recipients who live in their home, the home of a loved one, and some other residential settings, depending on the state.

The scope of coverage for HCBS Waivers can vary greatly by state. For example, some states may pay for adult day care using an HCBS Waiver, while other states may not pay for adult day care at all. As the name suggests, HCBS Waivers are for Medicaid recipients who continue to live at home or in the community (maybe with a family member, or in an assisted living facility), but Waivers can also vary from state to state when it comes to how many in-home doctor’s visits are covered, or how many hours of in-home therapy are allowed, or the level of home-modification that’s covered.

What makes moving with HCBS Waivers coverage even more complex is the fact that it is not an entitlement program. Nursing Home and ABD Medicaid are entitlement programs. This means that eligible applicants are guaranteed by law, aka “entitled,” to receive Nursing Home or ABD Medicaid benefits once their application has been approved. HCBS Waivers applicants, on the other hand, are not guaranteed coverage even if they are eligible. Instead, each state puts limits on all of their HCBS Waivers (the number and kind of Waivers also vary by state) in terms of beneficiaries. Once that limit is reached, the remaining qualifying applicants will be put on a waitlist to become beneficiaries. Waitlist length ranges from weeks to years.

So, someone who was receiving Medicaid benefits through a Waiver in one state might have to wait before receiving the same benefits in another state, even if they are eligible for those benefits.

In most states and in most programs, HCBS Waivers beneficiaries must prove a need for a Nursing Home Level of Care as a functional requirement for eligibility. They also must meet an asset limit ($2,000 for 2024) and an income limit ($2,829/month in most states for 2024) as financial requirements for eligibility. Unlike Nursing Home Medicaid beneficiaries, most HCBS Waivers beneficiaries are allowed to keep all of their monthly income.


How Retroactive Medicaid Helps in the Moving Process

A common worry among Medicaid Long Term Care recipients who are moving out of state is having a lapse in coverage. They can’t simply transfer coverage, they can’t be covered in two states at once, and trying to precisely sync coverage ending in one state with it starting in another feels too complicated and risky. Given these circumstances, it seems likely you or your loved one will have to pay out of pocket during the inevitable lapse in coverage that comes when moving out of state.

If that happens, Medicaid’s Retroactive Eligibility may cover the out-of-pocket expenses accrued during the lapse, up to three months and as long as the Medicaid applicant is eligible for Medicaid coverage in their new state during that time. Worth noting though is that some states are beginning to limit their Retroactive Medicaid coverage.


Assistance with Medicaid when Moving Out of State

As mentioned above, trying to coordinate the end of Medicaid coverage with the exact start of coverage in another state can be tricky. However, a Certified Medicaid Planner can help you or your loved one do exactly that and avoid lapses in coverage and out-of-pocket costs. Certified Medicaid Planners are knowledgeable about Medicaid rules and regulations across states, and they understand the timing of the application process. They can help you and your loved one find the necessary documentation, correctly fill out paperwork, and submit to the right offices. Some Elder Care Attorneys can provide similar services.

Relocating seniors can also seek help through Public Benefits Counselors or Case Managers. These professionals typically work at state Medicaid offices, Area Agencies on Aging, or Aging and Disability Resource Centers.