Medicaid Eligibility

You’re not alone if you decided to apply for Medicaid but got lost before going too far. Applying for Medicaid is not for the faint of heart. It’s confusing and complex. Each state has its own rules, and the rules change annually. Furthermore, at least in Virginia, each Medicaid Program has different rules and eligibility requirements. For example, a single mom’s Medicaid eligibility requirements differ from those for an elderly adult needing long-term care.

The Department of Medical Assistance Services (DMAS) provides information about Virginia’s Medicaid Programs. While it would be redundant to duplicate all their information here, I think it might be helpful to many readers to go over information on how to apply for basic Medicaid (long-term care Medicaid).

Virginia’s Long-Term Care Options

Virginia provides three long-term care options under Medicaid (Cardinal Care) for residents aged 65 and older.

Institutional/Nursing Home Medicaid – Anyone who meets eligibility requirements receives nursing home placement. It is an entitlement program, i.e., you are accepted if you qualify. However, institutional Medicaid applies only to care in nursing homes.

Medicaid Waiver/Home and Community-Based Services – This program is not an entitlement program but is provided based on the availability of resources. The goal is to limit or prevent nursing home placements and to promote receiving care in homes.

Regular Medicaid/Aged Blind and Disabled (ABD) – An entitlement program that guarantees assistance to eligible people.

The federal government and the state jointly fund Medicaid; however, each state creates and administers its programs. The agency in charge of Medicaid in Virginia is the Department of Medical Assistance Services (DMAS) which works with the local Department of Social Services (DSS) to determine individual eligibility.

Income & Asset Limits for Long-Term Care Eligibility

Persons eligible for Medicaid require prolonged medical care and have limited income and assets. The American Council on Aging provides a Medicaid Eligibility Test on its website, allowing individuals to check their eligibility status in advance. They also keep a current Long-Term Care Eligibility table posted that lists income, assets, and level of care requirements for Virginia’s three Long-Term Medicaid Programs.

Here’s an example of how eligibility is determined using Lynn and me as an example. 

1. Who’s applying?

Lynn is disabled and needs assistance with all activities of daily living and institutional activities. Therefore, he qualifies for Medicaid under the “medical needs” criteria. Since I am not disabled or need Medicaid for any other reason, we fall under the “Married (one spouse applying)” category.

2. Applicable Program – Medicaid Waiver/Home and Community-Based

I want to care for Lynn at home but cannot due to physical limitations. I need to hire a paid caregiver. Therefore, the Medicaid Waiver/Home and Community-Based Service Program would apply to our situation.

3. Eligibility Requirements

The income limit was $2,742/month for Lynn, and the Asset Limit was $2000 for Lynn and $148,620 for me. However, in 2023, eligibility requirements changed in Virginia. The Community Spouse Resource Allowance (CSRA) allows the non-applicant spouse to retain 50% of the couple’s assets up to $148,620. If the couple’s assets fall below $29,724, they may retain 100% of their assets. That means that if we own the assets in the example below, totaling $80,500, we must reduce those assets by half before we could become eligible for Medicaid. Therefore, we must reduce our assets to $40,250.

What are Assets?

Think of assets as anything you can turn into cash. If you can sell, trade, or make money with it, it’s likely an asset. Medicaid wants to find a way to pay for your care. Furthermore, they have no emotional hold on anything you own; therefore, anything is fair game to them. Your collection of baseball cards, your retirement-savings account, the little cabin belonging to your family for centuries, and your late grandmother’s jewelry from the old country are up for grabs. They go after all of it to liquidate for cash. 

Income/Money

Medicaid classifies what you own as either countable or non-countable assets. Always consider money an asset unless it’s a payment from the Holocaust restitution fund. Therefore, employment wages, alimony, pensions, cash, checking and savings accounts, investments, disability income, Social Security payments, IRA values and withdrawals, and stock withdrawals all count as income.

However, if an applicant is married, only their salary is considered when applying for Institutional Medicaid or Medicaid Waiver. Suppose the non-applicant’s salary is below a specific level. In that case, the applicant may transfer some of their income to his/her spouse to increase their income level to a Minimum Monthly income and maintenance needs amount.

If the individual is applying for Regular Medicaid/Aged Blind and Disabled, the income of both the applicant spouse and the non-applicant spouse count toward eligibility, and the option to transfer funds from one spouse to another to prevent hardships is not available.

Assets Besides Money

Non-countable assets are few, but they do exist. The applicant’s primary home in which they reside or intend to return if hospitalized, household furnishings, an automobile, and irrevocable burial trusts. Note: The home is automatically exempt if a spouse lives in it or the application is for Regular Medicaid. For the other Medicaid program applications, home equity comes into play. Home equity is the home’s value after considering how much money you could make if you sold it and deducted what you owed for outstanding debit.

Individuals who are long-term recipients of a Medicaid-funded program should notify their families that upon their death, all their property and possessions belong to Medicaid as repayment for services funded. Medicaid claims all personal property, land, the house, and personal belongings of the estate, whether there is a will. 

https://www.medicaidplanningassistance.org/medicaid-eligibility-https://commonhelp.virginia.gov