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The state where you live makes a difference in how much you pay as a Medicare beneficiary. This page describes resources available to qualifying Kentucky residents to help pay for Medicare coverage. It also details income and asset limits for various Medicaid programs related to long-term care, which is not generally covered by Medicare.
Many Medicare beneficiaries who struggle to afford the cost of Medicare coverage are eligible for help through a Medicare Savings Program (MSP).
MSP asset limits: Kentucky uses federal asset limits for QMB, SLMB and QI – which are $9,090 if single and $13,630 if married.
Medicare beneficiaries may also qualify for Medicaid based on their income and assets. For them, Medicaid for the aged, blind and disabled (Medicaid ABD) may provide coverage for services — such as dental or vision care and Medicare cost sharing — not covered by Original Medicare.
In Kentucky, Medicaid ABD provides “limited” coverage that includes emergency dental care, x-rays, extractions and fillings. Medicaid ABD also covers yearly vision exams, but it does not cover eyeglasses or contacts in Kentucky.
Income eligibility: The income limit for Medicaid ABD is $235 a month if single and $291 a month if married.*
Asset limits: The asset limit for Medicaid ABD is $2,000 if single and $4,000 if married.
*The income limit for Medicaid ABD Kentucky is unusually low. However, recipients of Supplemental Security Income (SSI) automatically receive Medicaid in Kentucky, which effectively increases the Medicaid income limit.
In 2023, individuals who are 65 or older, blind or disabled can qualify for SSI with incomes up to $914 a month if single and $1,371 a month if married. (The SSI program provides cash assistance that can increase the income of enrollees with few resources – usually with a monthly payment equal to the program’s income limit.)
SSI has the same asset limit for single applicants as Medicaid ABD ($2,000). But the SSI asset limit is lower than Medicaid’s limit for applicants who are married ($3,000 for SSI vs. $4,000 for Medicaid).
Medicaid spend-down for Medicaid for the aged, blind and disabled in Kentucky
An applicant whose income exceeds the limit for Medicaid ABD and who is not eligible for SSI can enroll in the Medicaid spend-down program. This program allows enrollees to use incurred medical bills to reduce their countable income to qualify for Medicaid.
When an applicant is approved for the spend-down, Medicaid calculates the portion of their monthly income above the program’s income limit; this amount is called “excess income.” Enrollees must activate their spend-down coverage by submitting medical bills equal to this excess income. (Excess income can be reduced payments for health insurance and Medicare premiums.)
In Kentucky, the Medicaid spend-down program covers three months of benefits at a time. New medical expenses have to be submitted to receive additional coverage.
The spend-down in Kentucky cannot be used to qualify for Long Term Services and Supports (LTSS).
Income eligibility: The income limit is $235 a month if single and $291 a month if married.
Medicare beneficiaries who also have Medicaid, an MSP, or Supplemental Security Income (SSI) will receive Extra Help. This program lowers Medicare Part D prescription drug costs. When beneficiaries apply for this program themselves, the income limit is $1,843 a month for singles and $2,485 a month for couples. The asset limit is $16,660 for individuals and $33,240 for spouses.
Medicare beneficiaries increasingly rely on long-term services and supports (LTSS) – or long-term care – which is mostly not covered by Medicare. 20% of Medicare beneficiaries who lived at home received some assistance with LTSS in 2015, and more seniors will need these services as the population ages. Medicaid fills this gap in Medicare coverage for long-term care, but its complex eligibility rules can make qualifying for benefits difficult. What’s more – eligibility rules vary significantly from state to state.
Most seniors used to receive long-term care in nursing homes. Today, more enrollees receive assistance in their homes. But some seniors have medical or living situations that make nursing home care a better choice.
Income limits: The income limit is $2,742 a month if single and $5,484 a month if married (and both spouses are applying). If only one spouse needs nursing home care, the income limit for single applicants is used – and usually only the applicant’s income is counted.
Although the nursing home income limit is $2,742 a month for single applicants, enrollees are required to pay all but a small portion of their income to their nursing home. Enrollees can keep money to pay for health insurance premiums (such as Medicare Part B and Medigap) and a small personal needs allowance of $40 each month).
Assets limits: The asset limit is $2,000 if single and $4,000 if married (and both spouses are applying). If only one spouse needs Medicaid, the other spouse can keep up to $148,620. Some assets are not counted toward the $148,620 limit — many household effects, family heirlooms, certain prepaid burial arrangements, and one car.
Every state’s Medicaid program covers community-based long-term care. These programs are known as Home and Community-Based Services (HCBS) waivers because recipients don’t have to enter a nursing home. HCBS enrollees must be able to live safely at home or in an assisted living facility.
Income limits: The income limit is $2,742 a month if single and $5,484 a month if married and both spouses are applying. If only one spouse needs HCBS, the single applicant income limit is used – and usually only the applying spouse’s income is counted.
Asset limits: The asset limit is $2,000 if single and $4,000 if married (and both spouses are applying). If only one spouse needs HCBS, the other spouse can keep up to $148,620.
The Medicaid spend-down does not cover LTSS in Kentucky, which means applicants are not eligible for nursing home care or HCBS if their income is above the eligibility limit of $2,742 a month (for single applicants). However, these applicants can qualify for nursing home care or HCBS by depositing income into a Qualified Income Trust or “Miller Trust.” Income placed in the Miller Trust is not counted when determining an applicant’s Medicaid eligibility.
Although this income is deposited into the Miller Trust beforehand, nursing home enrollees still have to pay nearly all of it toward their care. However, Kentucky allows HCBS recipients to keep a personal needs allowance to pay for certain health and living expenses.
Spousal impoverishment protections in Kentucky
Eligibility rules for Medicaid LTSS programs differ from other Medicaid benefits. When only one spouse is applying for LTSS, only that spouse’s income is counted. Normally with Medicaid benefits, the income of both spouses is counted regardless of who is applying.
Spousal impoverishment rules permit the non-applying or “community spouse” of a Medicaid LTSS recipient to keep a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their Medicaid spouse’s monthly income.
In Kentucky in 2022, these spousal impoverishment rules allow community spouses to keep:
Federal law requires states to limit eligibility for Medicaid nursing home and HCBS to applicants with a home equity interest below a specific dollar amount. States set these home equity levels based on a federal minimum of $688,000 and maximum of $1,033,000 in 2023.
Kentucky has chosen the most restrictive home equity limit – meaning that nursing home care or HCBS enrollees are limited to a home equity interest of $688,000 or less.
Because long-term care is expensive, individuals may give away or transfer assets to others to become eligible for Medicaid LTSS benefits. To curb asset transfers, federal law requires states to have a penalty period for nursing home applicants who give away or transfer assets for less than market value. States have the option to implement a penalty period for HCBS, too.
Kentucky has chosen to have an asset transfer penalty for nursing home care and HCBS. This penalty is based on a 60-month lookback period during which asset transfers and gifts are prohibited. The penalty period is calculated by dividing the amount of money transferred or given away by the monthly cost of care in a nursing home (which is $252.43 per day as of 2023).
Medicaid agencies are required to attempt to recover or “claw back” what they paid for long-term care related costs while an enrollee was 55 or older. The law also allows states to go even further and recover the cost of other Medicaid benefits.
Kentucky chooses to only pursue estate recovery against individuals who received LTSS beginning at the age of 55. The state also recovers from the estates of younger enrollees if they were “permanently institutionalized” for 6 months or longer. Although Kentucky will only recover from the estates of enrollees who received LTSS, if the state does attempt an estate recovery, it may also try to recover its payments for all other Medicaid benefits.
When Medicaid coverage was administered by a Managed Care Organization (i.e., a private insurer with whom the state contracts to administer Medicaid benefits), the state will attempt to recover what it paid that MCO. This amount could differ from the actual cost of the Medicaid services received.
Kentucky may decide not to pursue estate recovery if an enrollee is survived by their spouse or a child who is under 21, blind, or disabled.
An individual who inherits property can ask for it to be exempt from estate recovery if that property would be their only source of income. Kentucky may also choose to not pursue estate recovery from an estate that is valued at less than $10,000, or if recovering the estate wouldn’t be cost effective.
Kentucky’s Health Insurance Assistance Program (SHIP)
SHIPs can help beneficiaries enroll in Medicare, compare and change Medicare Advantage and Part D plans, and answer questions about state Medigap protections. SHIP counselors may also be able to offer referrals to local agencies for services like home care and long-term care.
Medicare counseling is available by contacting Kentucky’s Health Insurance Assistance Program (SHIP) at (877) 293-7447 (option 2); there is no charge for this service. The SHIP’s website has a list of local offices that offer counseling.
Elder Law Attorneys
Elder law attorneys can help individuals with Medicaid long-term care benefits. You can use the National Academy of Elder Law Attorneys (NAELA) search feature to find a local elder attorney.
Kentucky Aging and Disability Resource Centers (ADRCs)
Kentucky’s Area Agencies on Aging provide information and services about assistance programs available to older adults and people with disabilities, and help with planning for future LTSS needs.
Kentucky’s Medicaid program is administered by the Cabinet for Health and Family Services (CHFS). The CHFS website has more information about applying for Medicaid or a Medicare Savings Program in Kentucky.