What these state sections cover:
- Medicare Savings Programs – the types of programs in each state and the income and asset limits for eligibility
- Medicaid for the aged, blind and disabled – benefits and eligibility levels by state
- Medicare ‘spend down’ programs – income levels and whether long-term care is covered
- Medicaid nursing home coverage – including eligibility limits
- Home and Community Based Services waivers – benefits offered and income levels
- State rules about transferring assets to qualify for Medicaid coverage of long-term care.
- State financial tools that help beneficiaries to become eligible for Medicaid nursing home coverage or HCBS.
- State policies that affect estate recovery from Medicaid enrollees who received long-term care.
- State programs that help Medicare beneficiaries who struggle with the costs of prescription drugs.
- How you can apply for Medicaid or an MSP in each state.
Reaching the point of eligibility for Medicare is a significant milestone: entry into the largest public health program in the nation – a major source of health coverage for elderly and disabled Americans. It’s a welcome – and popular – “safety net” that has evolved over the decades and covers many medical expenses for its beneficiaries.
But this health coverage can be a source of confusion for Medicare enrollees – many of whom have an expectation that the program will provide long-term nursing home care or in-home care. In fact, Medicare has never covered long-term services and supports (LTSS) – an array of medical and personal “long-term care” services for people who struggle with self-care due to aging, illness or disability. Furthermore, Medicare can leave its enrollees with significant out-of-pocket expenses.
The good news is that Medicaid offers a long list of financial assistance options intended to help Medicare enrollees faced with Medicare cost sharing and long-term care expenses. These can include help with Medicare premiums, coverage for dental and vision services, some medical supplies, and in-home care.
Where you live affects your financial assistance
But because Medicaid is administered differently by each state, where Medicare enrollees reside has a significant impact on their eligibility for assistance. The pages in this section – including one for every state and the District of Columbia – are designed to help Medicare enrollees easily find the eligibility rules for programs and financial assistance in each state.
We’ve tried to make these pages a source of the often hard-to-find information that Medicare enrollees need to get a clear picture of financial assistance they can expect with Medicare and long-term care expenses. At the end of each section, we’ve included a list of resources that can provide further clarification on these topics.
Medicare Savings Programs vary by state
Medicare Savings Programs (MSPs) are Medicaid-administered programs that cover Medicare Part B premiums for eligible enrollees. Each state offers a set of MSP programs, which include the Qualified Medicare Beneficiary (QMB), Specified Low-Income Medicare Beneficiary (SLMB) and Qualified Individuals (QI) programs everywhere other than D.C. These programs pay for Part B premiums. One MSP also pays for Medicare Part A and B cost sharing, and covers Part A premiums for enrollees who owe them.
Receiving the MSP means Part B premiums are no longer deducted from an enrollee’s Social Security benefit, which results in an annual benefit increase of over $1,738.
Income limits: In 34 states in 2020, the income limit for MSPs is 135 percent of the federal poverty level, or a monthly income of $1,436 for individuals and $1,940 for married couples. Sixteen remaining states and D.C. use higher monthly income limits, which are highest in D.C., where the income limit is $3,190 for singles and $4,310 for spouses.
Another MSP is the Qualified Disabled Working Individuals (QDWI) program, which pays for Part A premiums for a small number of disabled enrollees who return to work. The monthly income limit for that program in most states is 200 percent of the poverty level, or $2,127 for individuals and $2,874 for enrollees who live with another person.
Asset limits: States are allowed to use an asset limit for MSPs in addition to an income limit. In 2020, 37 states use the asset limit set by the federal government for QMB, SLMB, and QI – which is $7,860 for individuals and $11,800 for married spouses. Three states have a higher asset limit than this, and 10 states don’t use asset limits for those programs.
Medicaid for the aged, blind and disabled (ABD)
In every state, Medicaid covers hospital and medical services for people who are 65 or older, blind or disabled. This coverage is usually at least as comprehensive as benefits offered by private insurers, and can pay for cost sharing expenses and services Medicare doesn’t cover (including vision and dental care, and some medical supplies).
Medicaid ABD pays after Medicare does for services covered by both programs. This usually leaves enrollees who are dual eligible – meaning they have both Medicare and Medicaid – with few out-of-pocket expenses.
Medicare beneficiaries don’t have access to dental or vision care through Original Medicare, although some Medicare Advantage plans cover those services. In many states, Medicaid provides comprehensive dental and vision coverage, and may also covers costly items like dentures.
As of September 2020, 39 states have adopted the Affordable Care Act’s (ACA) Medicaid expansion, which covers enrollees ages 19-64 with monthly incomes up to 138 percent of the federal poverty level ($1,467 for singles and $1,982 for couples). Medicaid expansion enrollees don’t have to satisfy an asset test.
Once an individual turns 65 or receives Medicare, however, they can no longer qualify for Medicaid under the expansion income limits, and different eligibility rules apply.
Asset limits: In nearly every state, these individuals are also subject to an asset limit (although this is not the case for applicants in Arizona, or in Arkansas and Massachusetts for applicants under age 65).
Income limits: The income limits for Medicaid ABD are closely related to Supplemental Security Income (SSI), which provides income support to elderly, blind and disabled Americans. In 2020, SSI’s income limit is $783 a month for individuals and $1175 a month for spouses, who receive cash payments that usually increase their income until it reaches this limit.
(Medicaid ABD has different names in each state. It is sometimes called community Medicaid, traditional Medicaid, or SSI-Related Medicaid.)
As of 2018, 25 states based their income limits for Medicaid ABD on the SSI income limit. Another 16 states and D.C. used a higher Medicaid income limit, while eight states had eligibility limits (for income or assets) that are more restrictive than SSI. (These states with more restrictive limits are called 209(b) states – based on the legal provision allowing them to limit access to Medicaid for SSI recipients.)
In most states, SSI enrollees automatically receive Medicaid, or are eligible for Medicaid but have to apply for it themselves. In eight states with more restrictive Medicaid rules, SSI recipients are not guaranteed access to Medicaid (but can often still qualify for it).
Most states’ asset limits for Medicaid ABD also are based on the SSI program, where resource limits haven’t increased since that program took effect in 1973, and are $2,000 for individuals and $3,000 for spouses.
Medicaid ABD uses the same asset limit as SSI in 40 states, and two states have even more restrictive asset limits. Medicaid’s asset limits are highest in New York, where they are $15,750 for single applicants and $23,100 for couples.
Medicaid ‘spend down’ program
Many states allow enrollees with incomes above the eligibility limit for Medicaid ABD to enroll in a Medicaid spend-down program, which allows medical expenses to be subtracted from income that is counted toward the Medicaid eligibility limit.
In some states, enrollees can also pay their “spend-down” amount to Medicaid directly, but other states require the submission of medical bills to receive spend-down benefits.
The Medicaid spend-down covers long-term services and supports (LTSS) in some states, but it does not cover those services in others.
Medicaid nursing home coverage
Many Medicare enrollees who live long enough will need help with long-term services and supports (LTSS) or “long-term care.” In previous decades, individuals nearly always received those services in a nursing home or another “institutional” setting. This is why Medicaid covers nursing home care for an unlimited number of enrollees in each state.
Medicare covers up to 100 days in a skilled nursing facility (SNF) for enrollees who require skilled nursing care or need physical or occupational therapy in an institutional setting. However, Medicare coverage ends once an enrollee no longer needs those “skilled services” (and this often occurs before 100 days).
Some Americans finance their long-term care by purchasing private long-term care insurance (LTCI) or paying for those costs themselves. But LTCI policies are unaffordable for many middle-income families, and must be purchased while relatively young. In 2019, nursing homes cost an average of $8,365 a month, which would rapidly deplete most couples’ savings. Medicare enrollees who need ongoing nursing home care often have to apply for Medicaid.
Medicaid eligibility rules used to require Americans to spend nearly all their savings before qualifying, and still do this to a certain extent. In 2020, 40 states required nursing home enrollees to have no more than $2,000 in savings in order to receive Medicaid nursing home coverage.
Medicaid’s restrictive asset limits were especially problematic when one spouse needed long-term care, but the other spouse was healthy enough to live at home. These “community spouses” had to completely impoverish themselves – by spending nearly all their assets and income on their spouse’s nursing home care.
Congress passed the Medicare Catastrophic Coverage Act (MCCA) in 1988 to reduce the impoverishment of spouses. That legislation allows spouses of nursing home recipients to keep a Minimum Monthly Maintenance Needs Allowance from income received by their nursing home spouse. In 2020, this “spousal allowance” is between $2,155 and $3,216 each month.
MCCA also allows these “community spouses” to keep as much as $128,640 in assets, although several states have a lower spousal resource limit.
Because of the enormous cost of long-term care, the income limit in many states for Medicaid nursing home benefits is higher than for Medicaid ABD. In 2020, 41 states allowed applicants to qualify for nursing home care with monthly incomes up to $2,349 per person.
Nine other states don’t have a set income limit for Medicaid nursing home benefits, although several of those require enrollees to have income below the cost of care. New York and Illinois are the only states that use the same income limit for both Medicaid ABD and nursing home benefits.
Despite these income limits, nursing home enrollees are not allowed to keep all of their income up to their state’s eligibility limit (or the cost of nursing home care). Enrollees must pay nearly all their income toward their care after entering a nursing home, other than a personal needs allowance and the cost of health insurance and Medicare premiums.
Medicaid Home and Community Based Services (HCBS) waivers
Every state’s Medicaid program has chosen to cover community-based long-term care services, which are provided to enrollees in their home, adult day care center, adult living facility, or another “community” location.
Medicaid programs offering this type of care are known as Home and Community Based Services (HCBS) waivers. Enrollees can receive these services without entering a nursing home.
Although states must cover Medicaid nursing home benefits for an unlimited number enrollees, they don’t have to cover HCBS. Because these HCBS benefits are costly, most states use waiting lists for at least some of these programs. (Over 707,000 enrollees in 40 states were on waiting lists for HCBS waivers in 2017.)
Furthermore, rules protecting against spousal impoverishment did not originally apply to recipients of HCBS. This meant Medicare beneficiaries in some states had to enter a nursing home, and have those protections apply to their spouse, instead of receiving long-term care at home.
The ACA required states to protect spouses of HCBS recipients from impoverishment, in addition applying this protection to spouses of nursing home enrollees, until the end of 2018. The CARES Act extended that requirement through November 2020.
It is unknown whether Congress will extend spousal impoverishment rules for HCBS enrollees once more. Several states will again require spousal impoverishment when an enrollee receives HCBS if this ACA provision expires.
State rules about transferring assets
Long-term care can be very expensive, which is why Medicare enrollees sometimes feel the need to reduce their assets so they qualify for Medicaid. This process can include giving away or transferring assets for less than they are worth.
States are required to penalize applicants seeking Medicaid nursing home benefits who gave away or transferred assets during the “lookback period” that is prior to their application (or before they entered a nursing home in some states). As of 2021, every state but California will also have an asset transfer penalty for HCBS.
Qualifying for Medicaid (and nursing home care or HCBS) with income above the eligibility limit
When a Medicare enrollee’s income is too high to qualify for Medicaid nursing home benefits or HCBS, their options for qualifying for those services depend on their state.
Some states have a Medicaid spend-down program, which allows applicants to subtract medical expenses (and often long-term care costs) from income that is counted toward the Medicaid eligibility limit. Medicaid spend-down programs cover long-term care in some states, but not in others.
Most states use a “special income limit” – usually equal to $2,349 a month – to determine eligibility for nursing home benefits and HCBS. In states that use this “special income limit” and don’t also provide long-term care coverage through a Medicaid spend-down, enrollees whose incomes are $1 higher than this limit are not eligible for Medicaid long-term care.
These states that don’t allow enrollees to pay income they can afford toward their long-term care, and have Medicaid pay the rest are called income cap states. Fortunately, federal rules allow applicants in these states to qualify for Medicaid long-term care benefits by depositing income into a Qualified Income Trust, which is also called a “Miller Trust.”
Most states that permit Miller Trusts allow applicants to use them to qualify for either nursing home benefits or HCBS.
Some states offer Medicaid spend-down and Miller Trust options. In other states, applicants are not able use a Miller Trust, but can use a “pooled trust” to qualify for Medicaid (and for LTSS benefits).
Estate recovery for Medicaid benefits
States are required to recover from the estates of Medicaid enrollees who received long-term care beginning at the age of 55. The law requires states to recover the cost of LTSS (and related medical and prescription drug costs), but states can also recover what they paid for other Medicaid benefits. This process is called “estate recovery.”
Many states used to recover the cost of all Medicaid benefits received beginning at age 55, but changed their estate recovery rules to prevent estate recovery from applying to Medicaid expansion enrollees between the ages of 55-64.
Congress exempted Medicare Savings Program (MSP) benefits paid after December 31, 2009 from estate recovery, but states may recover MSP benefits received through that date.
Medicaid prescription drug benefits / State Pharmaceutical Assistance Programs
Before the Medicare Part D prescription drug benefit took effect in 2006, low-income Medicare beneficiaries received prescription drug benefits through Medicaid.
To keep prescription drug costs affordable, Medicare enrollees who also have Medicaid, an MSP, or SSI are automatically enrolled in Extra Help. This federal program lowers prescription drug expenses under Part D to prices similar to those paid under Medicaid. (Due to their lower incomes, all disabled Medicare enrollees are assessed for Extra Help eligibility.)
However, Part D plans are not allowed to cover certain medications that Medicaid covers – including over-the-counter drugs, prescription vitamins, most non-FDA approved drugs, and some cough medicines. A few states provide a limited Medicaid prescription drug benefit that covers these drugs.
Some states also operate State Pharmaceutical Assistance Programs (SPAPs), which provide assistance to Medicare Part D enrollees with low and moderate incomes. These programs can help pay for Part D premiums and co-pays, and may cover drugs that aren’t covered by Part D. SPAP enrollees also receive a once-yearly special enrollment period (SEP) to select or change Medicare Advantage and Part D plans.
How do I apply for Medicaid benefits or an MSP in my state?
The way you apply for Medicaid ABD, MSP and long-term care benefits varies in each state. Some states allow you to apply for Medicaid ABD or MSP benefits online – or to begin your long-term care application. In other states, you have to submit a paper application at a Medicaid or social services office – or send this by mail or fax.
We have included information about applying for Medicaid at the end of each state page. When available, we included a link to the state’s online Medicaid application. We also listed the state agency in charge of eligibility.
If you’re applying for MSP or Medicaid ABD, your state should try to confirm information about your identity, income and assets without asking you to provide records. You would only need to provide Medicaid with identification documents, a Social Security award letter, pay stubs, or bank account statements if information couldn’t be verified electronically, or if electronic records don’t match what was listed on your application.
But eligibility for Medicaid long-term care benefits can’t be determined without your financial records. You’ll have to share 60-months of checking, savings, and retirement account statements when applying for those services. (Although in California, you only have to submit 30-months of records when applying for nursing home benefits, and don’t have to share records if you apply for HCBS. And when new financial rules for HCBS take effect next year in New York, applicants for those services will only have to provide financial records since late 2020.)
Every state used to require Medicaid to interview you when you applied for any benefits. But those rules have been relaxed, and you won’t be interviewed when applying for an MSP. Many states also no longer require Medicaid ABD applicants to be interviewed.
Medicaid will meet with you and your family if you apply for long-term care benefits. You would also be evaluated for whether you require a certain level of assistance with needs and activities, which could affect your eligibility.
Josh Schultz has a strong background in Medicare and the Affordable Care Act. He coordinated a Medicare technical assistance contract at the Medicare Rights Center in New York City, where he represented clients in extensive Medicare claims and appeals. In addition to advocacy work, Josh helped implement health insurance exchanges at the technology firm hCentive. He also has held consulting roles, including as an associate at Sachs Policy Group, where he worked with insurer, hospital and technology clients.