Medicaid Qualification Requirements
To qualify for Medicaid in Virginia, the following applies:
I: Applicant is Single and applying for Disabilty assistance.
A. Applying for Nursing Home Care using Medicaid: His income limit is $2,349/month and he can own no more than $2,000 in assets
B. If he wants a community waiver for care at home his income limit is again, $2,349 and his asset limit is also no more than $2,000.
C. If he applied for regular Medicaid due to needing low income assistance his income limit would be $851/month and his assets would remain $2,000/month.
II. A married couple applies for both individuals to receive Medicaid.
A. Both need nursing home coverage. Their joint income limit is $4,698/month and their joint asset limit if $4,000.
B. To obtain authorization for both to use a waiver for services for Community Based Services of Hospital care, the income level for both remains $4,698/month and assets stay at $4,000.
III. A married couple where only one is applying for Medicaid benefits.
A. The income limit for the applicant for nursing home consideration is $2,349/month. The income of the one spouse is not considered. Assets are considered for both. The Applicant’s asset limit is $2,000 and the non-applicant is $128,640.
B. If the Applicant is applying for a Community Waiver. His income limit is $2,349/month and the assets are again considered for both. $2,000 for the applicant and !128,640 for the non-applicant for nursing home or hospital based care.
IV. Regular Medicaid for low income criteria requires:
A. Single: $851/month income limit with $2,000 in assets.
B. Married with both applying: $1150/month income limit with $3,000 in assets.
C. Married with one spouse applying: $1,150/month income limit and $3,000 asset limit.
Help with Applying for Medicaid
Because the financial criteria (income and assets) for Medicaid are so restrictive, many applicants are not automatically eligible for the Medicaid program. However, this does not mean they cannot become Medicaid-eligible. Many individuals work with a professional Medicaid planner to increase their chances of becoming eligible sooner. Medicaid planners are familiar with the nuances of eligibility and can help families restructure their finances accordingly. The laws are very tricky, and seeking guidance on what to sell, how to reduce assets if needed, what counts as income, etc. is highly recommended.
For Medicaid eligibility purposes, any money that a Medicaid applicant earns or receives counts. The income can come from any source. Examples include employment wages, alimony payments, pension payments, Social Security Disability Income, Social Security Income, IRA withdrawals, and stock dividends.
When only one spouse of a married couple is applying for institutional Medicaid or a Medicaid waiver, only the income of the applicant counts. However, the same does not hold for a married couple with one spouse applying for Disabled Medicaid. In this case, the income of both spouses counts towards the income limit, even if only one spouse is an applicant.
There is a Minimum Monthly Maintenance Needs Allowance (MMMNA) for non-applicant spouses of Medicaid nursing home care applicants and applicants seeking Home and Community-Based Services via a Medicaid waiver. The MMMNA is the minimum amount of monthly income to which the non-applicant spouse is entitled. As of July 2019, this figure on the low end is $2,113.75 / month, which will increase in July 2020. On the high end, a non-applicant spouse may receive as much as $3,216 / month (this figure rises in January 2021). This rule allows the Medicaid applicant to transfer income to the non-applicant spouse to ensure he or she has enough funds with which to live. For clarification purposes, it is essential to mention that this spousal income allowance does not extend to non-applicant spouses of regular Medicaid applicants.
Virginia has a program called Medically Needy Pathway, which allows individuals who have income over the limit to gain Medicaid eligibility if they have high medical bills relative to their monthly income.
For Virginia elderly residents, 65 and over, who do not meet the eligibility requirements in the table above, there are still other means to qualify for Medicaid. For the Medically Needy Pathway Program, the income limits vary based on the geographic region of the state in which one resides. As of July 2019, the medically needy income limits include three groups. For Group I, the income limit for a single applicant is $336.31 / month and $415.42 for a married couple. Group II allows $376.51 / month for a single person and $436.61 for a married couple. The final group, Group III, allows $489.47 / month for an individual applicant and $590.11 / month for a married couple. The asset limit is the same regardless of the area of the state. The limit is $2,000 for an individual and $3,000 for a married couple.
Unfortunately, the Medically Needy Pathway does not assist one in spending down extra assets for Medicaid qualification. Said another way, if one meets the income requirement for Medicaid eligibility, but not the asset requirement, the above program cannot assist one in “spending down” extra assets. However, one can “spend down” assets by using them to purchase needed medical equipment or make necessary home modifications. Examples include buying wheelchair ramps, chair lift, grab bars, etc., or pre-paying funeral and burial expenses, and paying off one’s mortgage or credit card debt.
Countable assets include cash, stocks, bonds, investments, credit union, savings, and checking accounts, and real estate in which one does not reside. However, for Medicaid eligibility, many assets are considered exempt (non-countable). Exemptions include personal belongings, household furnishings, an automobile, irrevocable burial trusts, and one’s primary home, given the Medicaid applicant or his or her spouse lives in the home, and the home’s value falls under $595,000 (in 2020).
In 2020, for married couples with one spouse applying for nursing home Medicaid or an HCBS Medicaid waiver, the community spouse (the non-applicant spouse) can retain 50% of the couple’s joint assets, up to a maximum of $128,640. There is also a minimum resource allowance of $25,728. The non-applicant uses the Community Spouse Resource Allowance (CSRA), choosing the greater of either 100% of the assets, up to $25,728, or half of the assets, up to $128,640. As with the spousal income allowance, this resource allowance does not extend to non-applicant spouses of persons applying for regular Medicaid.
Countable AssetsCountable (non-exempt) assets count towards the asset limit. They are also sometimes referred to as liquid assets, which are assets that easily convert to cash. Countable assets include cash, bank accounts (checking, money market, savings), vacation houses, and property other than one’s primary residence, 401K’s and IRA’s that are not in payout status, mutual funds, stocks, bonds, and certificates of deposit.
Non-Countable AssetsNon-Countable (exempt) assets can not count toward Medicaid’s asset limit. Exempt assets include one’s primary home, given the individual applying for Medicaid, or their spouse, who lives in it. Some states allow “intent” to return home to qualify the home as an exempt asset. There is also a home equity value limit for exemption purposes. (Home equity value is the market value of one’s home minus any debt against it). As of 2020, the equity value cannot exceed $595,000, or $893,000, depending on the state in which one resides. However, there is no equity value limit if a Medicaid applicant’s spouse lives in the home. Other exempt assets include pre-paid burial and funeral expenses, an automobile, term life insurance, life insurance policies with a cash value no greater than $1,500, household furnishings/appliances, and personal items, such as clothing and engagement/wedding rings.
Married Couples with One ApplicantEven when only one spouse of a married couple is applying, Medicaid considers the couple’s assets jointly owned and counts them towards the asset limit. In the case of one spouse applying for nursing home Medicaid or long-term care via an HCBS (Home and Community Based Services) Medicaid waiver, the applicant spouse is generally able to retain up to $2,000 in assets. The non-applicant spouse, commonly called the community spouse, can retain a higher number of the couples’ combined assets. As of 2020, this figure, called the Community Spouse Resource Allowance (CSRA), can be as high as $128,640.
It’s essential to be aware that Virginia has a 5-year Medicaid Look-Back Period. The Look-Back Period of 5 years allows Medicaid to check to ensure that no assets were sold for less than their value or given away to meet Medicaid’s asset limit. If someone violates the look-back period, a period of long-term care Medicaid ineligibility will ensue.
How to Spend Down Assets to Become Eligible
If an applicant is over the asset limit for Medicaid eligibility, spending down excess non-exempt assets becomes paramount. As mentioned above, one must proceed with caution to avoid violating Medicaid’s look-back period, which is 60-months. Fortunately, there are many ways for one to spend down assets without breaking the look-back rule, and hence, avoid being penalized with a period of Medicaid ineligibility.
- One can pay off accrued debt, such as loans (vehicle, mortgage, personal, etc.) and credit card balances.
- One can purchase medical devices that are not covered by insurance, like dentures, eyeglasses, and hearing aids.
- One can make home reparations and modifications to improve access and safety, as well as build on to their existing home, such as adding a first-floor bedroom or bathroom.
- Vehicle repairs, such as replacing the battery, getting an engine tune-up, or replacing old tires are also a way to spend down assets, as is selling an existing car at fair market value and purchasing a new one.
- One can create a formal life care agreement, often referred to as personal care agreement. This type of agreement is generally between an elderly care recipient and a relative or close family friend. It allows the care recipient to spend down their excess assets while receiving needed care. It is vital to draft this type of contract properly, and that pay is reasonable for the area in which one lives. If it isn’t, one could violate Medicaid’s look-back period.
- One can purchase an annuity, which in simple terms, is a lump sum of cash converted into a monthly income stream for the Medicaid applicant or their spouse. The payments can be for a set period shorter than one’s life expectancy or equal to the beneficiary’s life expectancy.
- One can purchase an irrevocable funeral trust, to use for the expenses of a funeral and burial. In general, you can place up to $15,000 per spouse in a funeral trust. However, this amount varies by state.
- One can also cancel life insurance policies that have a cash value of over $1,500. (Remember, life insurance policies with a combined face value of $1,500 or less are exempt from Medicaid’s asset limit). Therefore, if one has a policy with a cash value of over $1,500, it’s best to cancel the policy or decrease the cash value. However, when canceling a policy or decreasing the cash value, the policyholder is paid either the cash value or the difference in cash value. Therefore, it’s essential to send the cash received on exempt assets, such as those mentioned above.
What are Consumer Directed (CD) Services?
In Virginia, Medicaid allows Consumer Directed Services (CD) so that individuals can remain at home or return home rather than stay at facilities due to limited agency resources. Services may include assistance with bathing, dressing, toileting, transferring, nutritional support, supervision, and respite services.
CD services are available in the following Virginia Medicaid waivers, benefit, and program:
- Commonwealth Coordinated Care Plus (CCC Plus) waiver
- Community Living (CL) waiver
- Family and Individual Supports (FIS) waiver
- EPSDT (Early and Periodic Screening, and Diagnostic and Treatment) Benefit
- Medicaid Works Program
How does a CD program work?
An individual who is already eligible for Medicaid applies for or has a Medicaid Waiver for one of the programs listed above. They contact a Services Facilitator who works with them to learn what is required to become an Employer of Record under the program. Once the paperwork is in place, the Employer of Record hires an attendant to perform the duties needed. The Attendant performs the functions and turns in a timesheet to the employer of Record who submits it to a Fiscal/Employer Agent who gets the check cut, and the Attendant gets paid. This program works particularly well in areas where formal services are limited, allowing families to identify informal resources in their area such as retired individuals and obtain financial and management assistance through Medicare as support.