Medicare beneficiaries increasingly rely on long-term care, and the portion of seniors needing these services will keep rising as the population ages. However, long-term care is mostly not covered by Medicare. While Medicaid fills the gap in Medicare coverage for long-term care, its complex eligibility rules can make qualifying for benefits difficult. What’s more – eligibility rules vary significantly from state to state.
Medicaid nursing home coverage in Virginia
Income limits: The income limit is $2,742 a month if single and $5,484 a month if married (and both spouses are applying).
When only one spouse needs Medicaid, the income limit for single applicants is used – and only the applicant’s income is counted.
However, this income limit doesn’t mean an applicant can keep all of this income up to the limit. Nursing home enrollees must pay nearly their entire income toward their care, other than a small personal needs allowance and the cost of health insurance premiums (such as Medicare Part B and Medigap).
Assets limits: The asset limit is $2,000 per applicant. If only one spouse needs Medicaid, spousal impoverishment rules allow the other spouse to keep up to $148,620.
Certain assets are never counted, including many household effects, family heirlooms, certain prepaid burial arrangements, and one car. Applicants also are not allowed to have more than $688,000 in home equity.
Home and Community Based Waiver (HCBS) services
Every state’s Medicaid program covers community-based LTSS services. These services are called Home and Community-Based Waiver (HCBS) services because recipients continue living in the community, rather than entering a nursing home.
Income limits: The income limit is $2,742 a month if single and $5,484 a month if married (and both spouses are applying).
When only one spouse needs Medicaid, the income limit for single applicants is used – and only the applicant’s income is counted.
This income limit doesn’t mean applicants can keep all of their income up to this limit once they begin receiving services. Virginia HCBS recipients are allowed a personal needs allowance, but nearly all their other income must be paid toward their care.
Assets limits: The asset limit is $2,000 per applicant. If only one spouse needs Medicaid, spousal impoverishment rules allow the other spouse to keep up to $148,620.
HCBS enrollees also cannot have more than $688,000 in home equity.
Spousal impoverishment protections in Virginia
Eligibility rules for Medicaid LTSS programs differ from other Medicaid benefits when only one spouse is applying. When this occurs, only the applying spouse’s income is counted. (Normally with Medicaid benefits, the income of both spouses is counted – regardless of who is applying.)
Spousal impoverishment rules allow community spouses of Medicaid LTSS recipients to keep a Minimum Monthly Maintenance Needs Allowance (MMMNA) from their Medicaid spouse’s monthly income.
In Virginia in 2022, these spousal impoverishment rules allowed community spouses to keep:
Medicaid home equity limit in Virginia
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.
Virginia uses the federal minimum home equity limit – meaning applicants with more than $688,000 in home equity are ineligible for LTSS programs.
Penalties for transferring assets in Virginia
Because long-term care is expensive, individuals can have an incentive to give away or transfer assets to make themselves eligible for Medicaid LTSS. To curb these asset transfers, federal law requires states to institute a penalty period for Medicaid nursing home applicants who give away or transfer assets for less than their value. States can also have a penalty period for community-based LTSS.
Virginia has an asset transfer penalty for both nursing home care and HCBS. The state uses a 60-month lookback period to calculate this asset transfer penalty – meaning that asset transfers or gifts made during this period may result in ineligibility. This penalty is calculated by dividing the value of asset transfers and gifts by the monthly cost of nursing home care. (These amounts are $9,032 in Northern Virginia and $6,422 everywhere else in the state).
Estate recovery in Virginia
A state’s Medicaid agency is required to recover what it paid for LTSS and related medical costs while an enrollee was 55 or older. The law allows states to also pursue estate recovery against beneficiaries who did not receive LTSS.
Virginia has chosen to recover what it paid for all Medicaid benefits beginning when an enrollee was 55. This means Medicaid expansion enrollees in Virginia are subject to estate recovery after they pass away, with the state allowed to recoup what it spent on their care starting when they turned 55.
When an enrollee’s Medicaid coverage was administered by a managed care organization (MCO; a private health insurance company that contracts with the state to provide Medicaid coverage), the state will attempt to recover what it paid the MCO. That means the estate recovery amount could be more (or less) than the actual cost of Medicaid services received.
Virginia will grant an exemption to estate recovery in cases where recovering from an estate would cause undue hardship.
