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Medicaid And Long Term Care

Eligibility For Long Term Care: Income Restrictions

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Income limits are set by each state.

If your income exceeds the income requirements in your state you may still qualify for custodial care if your income can be reduced below the limit for maximum eligible income for a single individual to qualify for Medicaid.

You can "Spend down" (becoming "Medically Needy"):

  • "Spending down" is incurring medical expenses on a monthly basis which reduce your income to below the state's income requirements. An includible medical expense is the cost of a nursing home. To learn more, see: Medicaid: Medically Needy.
  • Some 20 states have an "income cap." In those states, if your gross income exceeds the amount of the cap, even by as little as one dollar, there is no eligibility for Medicaid custodial care, regardless of the size of your medical bills or the cost of the nursing home. Income Caps vary from as little as an amount equal to the Supplemental Security Income ("SSI") basic benefit amount for a single individual, to 300% of the SSI benefit. Most states which impose a cap apply the 300% cap.

If you are "disabled," you may be able to transfer your "excess" income to a nonprofit pooled-income trust.

  • Instead of the extra income coming to you or a health care provider, it goes to a pooled-income trust. The trust uses the money to help pay your bills rather than to offset the cost of your care.
  • You give the trust instructions about how the money is to be used • for example, for rent, food, utilities, clothing, etc.
  • Trusts generally charge a nominal service fee which is often determined on a sliding scale.
  • Upon your death, the funds remaining in the account stay with the trust to benefit other disabled individuals. It is likely that the amount left over is very small given the need to utilize the funds each month.
  • The arrangement has to be reviewed by Medicaid before a final determination about eligibility is made.

If you have a spouse:

  • The healthy spouse's income is ignored if the unhealthy spouse is institutionalized. (To learn more, see: Healthy Spouse's Income).
  • If both husband and wife live on the patient's income, a part of the income is not counted. The part eliminated goes by the unwieldy name of the Minimum Monthly Maintenance Needs Allowance and is generally called by its initials: MMMNA. If the actual costs of maintaining the home are higher than the current MMMNA, most states permit a higher allowance based on a complicated formula called Excess Shelter Allowance. (To learn more, see: The Patient's Income • Minimum Monthly Maintenance Needs Allowance (MMMNA).
    • If you have a family member that lives with you at home (or did live with you prior to institutionalization): All states permit a deduction from the patient's income for each such family member. (To learn more, see: Family Member Allowance).

SSI Benefits Reduction: While confined in a facility for more than ninety days, Supplemental Security Income benefits are reduced to $30 per month for "personal needs." A statement by a doctor about your ability and intent to return to your private residence in the near future can usually avoid having the SSI benefit reduced, at least temporarily.


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