BACKGROUND
Medicaid eligibility is extremely difficult to understand. There are several different types of Medicaid programs, and each has its own eligibility criteria. Due to the complexity of the program, I highly recommend you seek the advice of an attorney or consultant familiar with Medicaid rules to assist you in applying rather than attempting to figure it out yourself. Medicaid is a very restrictive benefit; therefore, multiple twists and turns are in the law preventing most people from being eligible. Unless you read the details carefully, it is easy to miss the requirements and failure to complete the forms correctly can lead to penalties. This is one process where working with someone who has experience pays off.
The Medicaid Eligibility Manual requires 23 chapters to cover all the details related to eligibility. CoverVa provides the most current details related to the insurance coverage for the policies that support the benefits provided under the Medicaid policies. That’s a lot of pages to thoroughly cover Medicaid so what I’m about to give you here is just the tip of the iceberg. To get the full details, go to DMAS’s website (click on the links above) and/or speak to an estate attorney to help you with your Medicaid application or to determine your eligibility status. started.
PROGRAM STRUCTURE
Virginia has two programs that assist individuals and families financially with medical cost – Medicaid and Family Access to Medical Insurance Security Plan (FAMIS). Collectively, these programs are referred to as medical assistance (MA). Medicaid is jointly funded by state and federal funds, but the State Plan establishes regulations for how it operates in Virginia. Each state has its own rules for how Medicaid operates in that state.
The Department of Medical Assistance Services (DMAS) runs both programs and determines individual eligibility through submission of applications through the local departments of social services. Therefore, if you plan to submit an application for Medicaid, if you do not submit it online or while you are hospitalized, you will submit it to your local Department of Social Services.
MEDICAID PURPOSE
Medicaid’s purpose is to provide medical assistance to families receiving financial assistance from the government already due to an inability to support themselves either due to age, disability, the need to care for others, or another reason qualified by the State Plan. Most of the time, the recipients are families with young children and those with serious disabilities. Usually, the elderly become recipients after age 65 once they spend down all their assets below $2000 to become eligible for nursing home placement. In 2019 Medicaid expanded to include Virginia adults aged 19-64 who were not covered by Medicare and who met income eligibility rules (no resource rule).
SCREENING PROCESS
Individuals applying for Medicaid are screened in two ways. They must meet background eligibility requirements, called non-financial criteria, and then they must have their financial assets evaluated to determine if their income is low enough to warrant assistance. The manual emphasizes, this program is not about whether a person’s medical condition or situation has merit to deserve assistance. The only factor that matters is money. Yes, the background criteria must be met but most of the time those factors, if anything is missing, an alternate form of identification or proof can be found. What usually prevents eligibility is the individual’s assets, i.e., their valuables, savings accounts, property, etc. If they own hardly anything, chances are they will not qualify until they reduce or “spend down” the value of those assets.
NON-FINANCIAL REQUIREMENTS TO APPLY
To receive Medicaid, an individual must:
- Live in the United Stated – therefore, the applicant must show proof of having a residence (temporary or permanent) in the United Stated (see Eligibility Manual M0210.150)
- Be a citizen of the United States, be in the United States legally, or if in the United States illegally, needs benefits on an emergency basis. (see Eligibility Manual M0220)
- Show proof of Virginia residency – (see Eligibility Manual M0230)
- Be a member of an eligible covered Group – (see Eligibility Manual M03)
- Be willing to assign rights to medical benefits and pursuit of support from the absent parent requirements (M0250).
- Social Security number (SSN) provision/application requirements (M0240).
- Meet Institutional Status Requirements (M0280).
FINANCIAL REQUIREMENTS
As I mentioned before, Medicaid eligibility determination is all about determining if you are poor enough to receive financial assistance once it’s determined if you qualify based on your background criteria.
Think about everything you own – money, property, investment, burial plots, insurance policies that you could cash in, retirement accounts that you could provide cash outs, baseball card collections, property you own in a timeshare, family inheritance, everything and anything that could be turned into cash. Anything that is case or that could be turned into cash though selling it becomes a potential asset through the eyes of Medicaid financial accounting.
Medicaid isn’t completely heartless. They do recognize that you do need a place to live, furniture, clothes to wear, a car to drive, and a small amount of cash ($2,000) on which to live every month to buy groceries and pay bills. These are considered non-countable assets and can be carved out from consideration when Social Services looks at your income to determine if you are poor enough to be eligible for Medicaid.
Here is a complete list of non-countable assets:
- your home (while you live in it).
- personal effects, including clothing, jewelry, and photographs.
- household furnishings, such as furniture, paintings, appliances, and electronics that are exempt only while being used in the applicant’s home.
- one automobile.
- certain rental property that is essential to your self-support.
- some life insurance policies.
- some burial funds and cemetery plots.
- some irrevocable trusts and purchases.
These above non-countable assets get counted if you need long-term care coverage.
COUNTABLE ASSETS
Everything else is considered countable assets. Among countable assets are bank accounts, stocks, Individual Retirement Accounts, deeds of trust, or real property other than the home.
If you are considering applying for Medicaid because you may need long-term care assistance, please consult a Medicaid attorney. Qualifying is very complicated. Medicaid gets very upset if they believe that you are attempting to falsify your history of assets to them. If they suspect you have “dumped” assets (sold something of value for less than fair market value) to qualify for benefits sooner, they will make you ineligible to apply for Medicaid for an extended time frame. For example, if you give your married daughter, your 2025 Honda Accord after your wife died for free and then you decide two years later you want to apply for Medicaid, then Medicaid is going to suspect you gave her that car to reduce assets. Any gift given below market value within 60 months prior to your application for Medicaid, could cause such a penalty period. Therefore, once you come to the age where you might need Medicaid, don’t give away high dollar items if you might need to apply for Medicaid within the next 60 months.
Consult an attorney if you want to give your daughter that gift because chances are you won’t be eligible for Medicaid anyway and you should not allow the possibility that you might need it one day to prevent you from being loving to your family.
You can request a Medicaid resource assessment before you file an application for Medicaid to determine if you will likely be eligible. It’s a good way to find out if you will need to do a spend down before having an application approved or to determine if you would ever be eligible.
ASSET LIMITS
If you are not married, all the money/assets you can have beyond what is not counted is $2,000. That $2,000 includes cash and any additional personal property not protected under the non-counted items. If your social security check is $1,950 before taxes and you get a cost-of-living increase that takes you over $2,000 cap, then you become disqualified for Medicaid benefits. Each year you have Medicaid you must reapply for eligibility to see if this has happened. Did a cost-of-living adjustment or any other change in circumstance result in the loss of your eligibility for benefits.
Determining eligibility for married couples is extremely complicated when one of them needs to go into a nursing home and the other needs to remain at home. The one entering the nursing home is referred to as the “institutionalized spouse,” (doesn’t that sound nice?) and the spouse is called the “community spouse” (which sounds vulgar.)
Medicaid considers that what one spouse has, so does the other, therefore, if one of them is going into the nursing home, they will allow up to half of the applicant’s resources to “transfer” (since they are jointly owned resources, it’s actually retain) to stay with the community spouse (within a minimum and maximum that changes annually).
How to Calculate the Community Spouse Resource Allowance (CSRA)?
All countable assets of a couple, regardless of which spouse legally owns an asset, are determined on a “snapshot date”. The total value of the couple’s non-countable assets is added together on this date, and the Community Spouse Resource Allowance is determined. Half of a couple’s assets are considered owned by the institutional spouse, and the other half owned by the community spouse. A community spouse can keep half of the couple’s countable assets, up to the maximum of the range. If the community spouse’s share is under the maximum, $157,920, this is the amount of their CSRA. The minimum amount required for reduction is $31,584. If the community spouses are under $31,584, they can retain 100% of the couple’s assets, up to this amount.
For example, Virginia’s minimum/maximum range for 2025 was $31,584 – $157,920. If the husband and wife jointly owned assets that totaled in amount to $150,000, then the calculation would be: $150,000 ÷ 2 = $75,000. The Institutional spouse must get his income down to $2000 to become eligible to qualify to enter the nursing home. The community spouse can keep their $75,000, but they will need to spend the institutional spouse’s income down to $2000. Therefore, they need to “spend down” $73,000 in assets to qualify. If their total assets had exceeded $157,920, they would have had to spend down 100% of their assets to the maximum of the range and then apply the 50% rule for the community spouse to retain assets below that level.
Senior Virginians Handbook 2025 See Medicaid page 36
