Medicaid is a government program that provides healthcare coverage to those with limited income and resources. Although the Medicaid program provides assistance to several different groups, we are specifically focused on the eligibility rules and coverage for individuals who are age 65 or older, blind, or disabled (ABD) who are seeking long-term care benefits.
Medicaid rules and regulations vary by state and include strict financial and non-financial qualifications. When seeking Medicaid eligibility, most seniors have too many assets to qualify and are unable to meet the limitations until they’ve depleted their life savings paying the nursing home bill.
Fortunately, it’s never too late to plan, even for those who are already in a nursing home.
Non-Financial Requirements for ABD Medicaid
In order to meet the non-financial qualifications for Medicaid, an individual must be:
- A U.S. citizen or qualified non-citizen
- Age 65 or older, blind, or disabled
- Residing in a Medicaid-approved facility
Financial Requirements for ABD Medicaid
The financial qualifications for Medicaid fall under two major categories: income and assets. Having too much income or too many assets will prevent an applicant from qualifying for benefits.
In most states, an individual’s income, including Social Security, pension, and other earned and unearned sources, must be less than the private pay rate of the facility. A few states apply a different income cap from the private pay rate, such as the facility’s Medicaid Reimbursement Rate or a different limit.
In the case of a married couple, the spouse in the nursing home, known as the institutionalized spouse, is subject to the single person rules outlined above. The spouse living at home, known as the community spouse, is not subject to any income restrictions, meaning they can receive unlimited income and still qualify the institutionalized spouse for benefits. If the couple receives joint income, one-half will be attributed to the institutionalized spouse.
For Medicaid purposes, assets are divided into two categories: exempt and countable. Exempt assets are not considered when determining Medicaid eligibility, so the applicant and their community spouse can retain any of these assets without jeopardizing their benefits. Common exempt assets include the primary home, one vehicle, personal effects, life insurance (face value below $1,500 in most states), and funeral expense trusts (face value below $15,000 in most states).
On the other hand, countable assets include non-exempt resources that hold value and could become liquid. To qualify for Medicaid, the applicant and community spouse can only keep a certain amount of countable assets. Common countable assets include checking and savings accounts, CDs and Money Market accounts, stocks, bonds, mutual funds, additional real estate and vehicles, and IRAs, though the classification of an IRA as countable or exempt varies by state.
Individual Resource Allowance
The Individual Resource Allowance pertains to the amount of countable assets an individual or institutionalized spouse can retain while still qualifying for Medicaid benefits. This allowance is $2,000 in most states.
Community Spouse Resource Allowance
The Community Spouse Resource Allowance (CSRA) pertains to the amount of countable assets a community spouse can keep while still qualifying the institutionalized spouse for Medicaid benefits. This allowance varies by state but is generally between $29,724 and $148,620 in 2023. Some states apply a standard CSRA, and others apply a minimum and maximum allowance.
To learn about the specific Medicaid requirements and crisis planning information for your state, view your state resources.