Exempt Income under Medicaid

April 13, 2006

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Certain income is exempt from consideration in determining the applicant's eligibility for Medicaid. Income that is not exempt must be used to pay nursing home costs. The following income is exempt:

$75 per month earned by the applicant, for support of the applicant
unlimited income earned by the applicant's spouse
$1,515 to $2,267 per month earned by the applicant for support of the applicant's spouse, only if the applicant's spouse continues to reside at home; these amounts are the minimum and maximum for this exemption (This exemption is designed to allow the applicant to continue to make a contribution toward supporting the family home after entering a nursing home. A complicated formula is used to determine the exact amount. Basically, the applicant is allowed to add the excess costs of operating the home above $455 to the minimum exemption amount of $1,515 per month, subject to a maximum exemption of $2,267 per month.)

Note that a single applicant is only allowed to keep $75 per month of earned income.

In addition, certain amounts of assets are exempt under Medicaid. Beyond these exemptions, the timing of any asset transfers, whether to individuals or into a trust, will be scrutinized and could result in penalties or ineligibility for Medicaid.