Income Eligibility for Medicaid
Medicaid programs offer assistance to needy persons who cannot afford to pay for their medical care. The federal and individual state governments jointly administer Medicaid. While federal statutes and regulations provide the template, each state establishes its own methodology for administering its Medicaid program. Among other things, Medicaid covers nursing home costs such as nursing services and custodial care to needy persons.
Any person who receives Supplemental Security Income (SSI) is usually eligible to receive Medicaid benefits to pay for nursing home care. The majority of states follow SSI guidelines to determine categories of eligibility. A minority of states, the so-called "Section 209(b)" states, set more restrictive eligibility guidelines.
Depending upon the state, a person 65 years of age or older who is not "categorically needy" may be considered "medically needy" and eligible for benefits. A "medically needy" person typically meets the age requirement but has an income level that exceeds the state's established income limit. If a state opts to provide Medicaid benefits to a person in this category, it may allow her to "spend down" her income and reduce it to a level below the maximum income level allowed by the state's Medicaid plan. There are states that do not allow a "spend down." Some states' Medicaid plans do not cover nursing home care, while others set "income caps" that will preclude eligibility if the applicant's income exceeds a specified amount. Income levels also depend upon whether the applicant is married or single.
All of the applicant's available income is considered. The applicant's available income cannot exceed the state's minimum monthly needs allowance. Available income generally means income actually received, although assets in certain trusts such as revocable trusts are considered an available resource. Each state also sets its own "Personal Needs Allowance," which ranges from $30 per month and upwards. Money used for personal needs such as clothing is excluded from the income calculation. Some types of income are disregarded. If an applicant is receiving SSI payments, the SSI payment is generally not included as available income. Payments made for medical expenses, even Medicare and health care insurance premium payments, may not be considered in determining monthly income. Other allowances that will be excluded from the income determination are established on a state-by-state basis.
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