Many people rely on Medicaid, also known as Title 19, to pay for their nursing home care or in-home services under the Medicaid Elderly Waiver program.  Medicaid is a needs-based program for people who cannot afford the care they need. The financial eligibility rules for nursing home Medicaid and the Elderly Waiver are the same.  In general, people are financially eligible for Medicaid for nursing home care if their income in 2021 is $2,382 or less per month and their nonexempt resources are $2,000 or less. In some instances, people with incomes above $2,382 per month may be eligible for Medicaid if they can establish a medical assistance income trust, also known as a Miller Trust. All non-exempt resources count toward the $2,000 limit. Exempt resources that do not affect your eligibility include a car, homestead, household goods, and prepaid funeral plans.  

Medicaid eligibility is much more complicated for married people. The Medicaid program allows the spouse who lives outside of the nursing home (the “community spouse”) to have more than $2,000 in resources without disqualifying the spouse who lives in the nursing home from receiving Medicaid.  The community spouse’s income does not count toward the $2,382 income limit.  In addition, if the community spouse’s monthly income is less than $3,260 then part or nearly all the income from the spouse in the nursing home may be kept by the community spouse.  

 Apply for Medicaid Immediately

Many people fail to apply for Medicaid when they enter a nursing home and wait until most of their assets are gone. This is a big mistake. To receive maximum Medicaid benefits, married individuals should go to the Iowa Department of Human Services (DHS) and apply for Medicaid when one spouse enters a nursing home. DHS will decide how many assets each spouse can keep.  All non-exempt resources of the couple are considered to be available to pay nursing home costs, regardless of which spouse owns them. DHS will assign one-half of the nonexempt assets to each spouse, provided the community spouse is assigned a minimum of $26,076 and a maximum of $130,380 (in 2021).  DHS will notify the couple that the spouse in the nursing home is not eligible for Medicaid to pay his or her expenses until the spouse in the nursing home has reduced the value of his or her assets to $2,000.  Although assets cannot generally be reduced to $2,000 by giving assets away, there are many ways to reduce assets that benefit both spouses.

Appeals May Allow More Assets to be Kept

Couples who have over $26,076 in assets should not assume that the initial DHS decision regarding the attribution of resources is correct. If the couple’s combined income is less than $3,260, filing an appeal with DHS may allow additional assets for the community spouse to be set aside.  Whether the appeal is granted will depend on the couple’s income, life expectancy, and amount of the original attribution.

After the final attribution of resources, all of the resources assigned to the community spouse must be placed in the name of the community spouse in order for the resident spouse to maintain eligibility for Medicaid. All exempt resources, such as the home and car, should also be transferred to the community spouse because of Iowa’s Estate Recovery Statute.

The rules for qualifying for Medicaid are often complex and confusing. You may call the Legal Hotline for Older Iowans at 1-800-992-8161 if you have questions or would like more information about Medicaid eligibility.

Iowa Legal Aid provides help to low-income Iowans. 

To apply for help from Iowa Legal Aid:

• Call 800-532-1275. 
• Iowans age 60 and over, call 800-992-8161.
• Apply online at iowalegalaid.org

If Iowa Legal Aid cannot help, look for an attorney on “Find A Lawyer”   A private attorney there can talk with you for a fee of $25 for 30 minutes of legal advice.

*As you read this information, remember this article is not a substitute for legal advice.