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.
Medicaid 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.
Age as a Qualifying Factor – It is worth noting that age does not impact the dollar limits for Medicaid long term care eligibility but rather can be a qualifying factor for a specific program. As an example, there will not be different income limits for persons over and under 65 years of age, rather a Medicaid program is simply not open to persons under 65.
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. See your state income and assets limits here.
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.
Covid-19 stimulus checks are not counted as income. However, if not spent after one year and allowed to accumulate, the money will be counted as an asset.
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. See your state income and assets limits here.
Assets cannot be given away or sold under market value in an effort to reach the asset limit and asset transfers as far back as 5 years preceding the application date are reviewed. This is called the Look-Back Period.
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 and Medicaid Waivers requires a nursing home level of care while ABD Medicaid does not have a level of care requirement.
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.
Helpful Links for Medicaid Long-Term Care Eligibility.
www.medicaid.gov/medicaid/eligibility/index.html
www.medicaidplanningassistance.org/state-specific-medicaid-eligibility/