Medicaid Eligibility Requirements

You must meet three types of requirements to qualify for Medicaid long term care services:

General medicaid eligibility requirements
Functional requirements
Financial requirements

What are general Medicaid eligibility requirements?

To meet the general Medicaid requirements for long term care services you must:

Be age 65 or older
Have a permanent disability
Be blind
Be a U.S. citizenship or meet certain immigration rules
Be a resident of the state where you apply

What are functional eligibility requirements?

In order for Medicaid to cover your long-term care services, a medical specialist in your state must evaluate your needs and decide if you need long-term care services. Usually, the specialist will make their decision based on whether you need assistance performing certain Activities of Daily Living (ADLs), such as:

Bathing
Dressing
Using the toilet
Transferring to or from a bed or chair
Caring for incontinence
Eating

If you do not meet Medicaid’s functional eligibility criteria, Medicaid will not cover long-term care services, regardless of financial eligibility.

If you do need long-term care services, the specialist will usually determine if you need nursing home care or home and community-based services.

The functional eligibility evaluation is not the same as your financial eligibility evaluation.

What are Medicaid's financial eligibility requirements?

To see if you meet the financial eligibility requirements for Medicaid, the state will look at your available income and assets.

Income
To get Medicaid, you must have limited income and savings. The amount of income varies by state, but is generally set at the poverty level which in 2010 is $22,050 per year for a family of four. When the state determines your financial eligibility for Medicaid, the state will count some of your income, but not all. Your income includes these sources:

Regular payments such as Social Security
Veterans’ benefits
Pensions
Salaries
Wages
Interest from bank accounts

Medicaid will count payments to which you are entitled even if you don’t receive them. For example, if you get $500 a month from a trust that could pay you $1,000, Medicaid counts $1,000 as your income. If you and your spouse receive joint payments, such as rental income, the state allocates half to you and half to your spouse.

Assets
When the state determines your financial eligibility for Medicaid, some of your assets are considered, while others are excluded. During the Medicaid application process, you will have to document your assets. While Medicaid’s assessment of your income is relatively straightforward, the assessment of your assets is fairly complex.

Assets that do not get counted for eligibility include the following:

Your primary residence
Your personal belongings
One motor vehicle
Property that is essential to self-support
Life insurance with a face value under $1,500
Certain burial arrangements
Assets held in specific kinds of trusts.

Unless specifically excluded, any other real or personal property that you and your spouse own is counted in the Medicaid eligibility determination.

If you own assets jointly with others, the assets are generally divided equally among all owners when the state determines your Medicaid eligibility.

The amount of assets you can have and still qualify for Medicaid varies from state to state. In most states, you can retain about $2,000 in countable assets and married couples who are still living in the same household can retain about $3,000 in countable assets.

If one spouse lives in an institution and the other lives in the community, the community spouse is allowed to keep more assets without disqualifying the spouse in the institution from Medicaid coverage. In most states, the community spouse is allowed to keep half of the married couples’ combined assets, subject to both a minimum and a maximum amount. In 2010, the minimum was $21,912 and the maximum was $109,560.