Income & Asset Limits for Eligibility

The three categories of Medicaid long-term care programs have varying financial and medical eligibility criteria. Further complicating eligibility are the facts that the financial requirements change annually, vary with marital status, and that South Carolina offers multiple pathways towards Medicaid eligibility.

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Income Definition & Exceptions

Countable vs. Non-Countable Income
Nearly any income from any source that a Medicaid applicant receives is counted towards Medicaid’s income limit. Examples include employment wages, alimony payments, pension payments, Social Security Disability Income, Social Security Income, IRA withdrawals, stock dividends, and Veteran’s benefits with the exception of Aid & Attendance. Holocaust restitution payments are another exception and are considered non-countable income.

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Treatment of Income for a Couple
When only one spouse of a married couple applies for Nursing Home Medicaid or a Medicaid Waiver, only the applicant’s income is counted towards the income limit. This means the income of the non-applicant spouse does not impact their spouse’s income eligibility. The non-applicant spouse, however, may be entitled to a Monthly Maintenance Needs Allowance (MMNA) from their applicant spouse to prevent spousal impoverishment. In 2023, the MMNA in South Carolina is $3,715.50 / month. If a non-applicant spouse has monthly income under this amount, income can be transferred to them from their applicant spouse to bring their monthly income up to this level. A non-applicant spouse who already has a monthly income of $3,715.50 or more is not entitled to a MMNA / spousal income allowance.

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Income is counted differently when only one spouse applies for Regular Medicaid / Aged Blind or Disabled; the income of both the applicant spouse and non-applicant spouse is calculated towards the applicant’s income eligibility. Furthermore, a non-applicant spouse is not entitled to a Monthly Maintenance Needs Allowance. More on how Medicaid counts income.

 

Asset Definition & Exceptions

Countable vs. Non-Countable Assets
The value of countable assets are added together and counted towards Medicaid’s asset limit. This includes cash, stocks, bonds, investments, bank accounts (credit union, savings, and checking), any remaining funds from Covid-19 stimulus checks, and real estate in which one does not reside. There are also many assets that are considered exempt (non-countable). Exemptions include personal belongings, such as clothing and jewelry, household furnishings, one vehicle, up to $1,500 per spouse in burial funds, the cash value of life insurance policies up to a combined face value of $10,000, and generally one’s primary home.

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Home Exemption Rules
For home exemption, one of two circumstances must be met. 1) The Medicaid applicant must live in the home or have Intent to Return, and in 2023, their home equity interest must not be more than $688,000. Home equity is the value of the home after subtracting any outstanding debt against it. Equity interest is the amount of the home’s equity that is owned by the applicant. OR 2) A non-applicant spouse lives in the home.

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While one’s home is generally exempt from Medicaid’s asset limit, it is not exempt from Medicaid’s Estate Recovery Program. Following a long-term care Medicaid beneficiary’s death, South Carolina’s Medicaid agency attempts reimbursement of care costs through whatever estate of the deceased still remains. This is often the home. Without proper planning strategies in place, the home will be used to reimburse Medicaid for providing care rather than going to family as inheritance.

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Treatment of Assets for a Couple
All assets of a married couple are considered jointly owned. This is true regardless of the long-term care Medicaid program for which one is applying and regardless of if one or both spouses are applicants. However, the non-applicant spouse of a Nursing Home Medicaid or Waiver applicant is permitted a Community Spouse Resource Allowance (CSRA). This is a Spousal Impoverishment Provision, and in 2023, allows the community spouse (the non-applicant spouse) to retain up to $66,480 of the couple’s assets.

Medicaid’s Look-Back Rule

It is vital that one does not give away assets or sell them for under fair market value within 60-months of applying for Nursing Home Medicaid or a Medicaid Waiver in South Carolina. Doing so is a violation of Medicaid’s Look-Back Rule, a period that immediately precedes one’s Medicaid application date in which all asset transfers are reviewed. Violating this rule results in a Penalty Period of Medicaid ineligibility.

 

The U.S. Federal Gift Tax Rule does not extend to Medicaid eligibility. In 2023, this rule allows one to gift up to $17,000 per recipient without filing a gift tax return. Gifting under this rule violates Medicaid’s 5-year Look-Back Period.

 

Medical / Functional Need Requirements

An applicant must have a medical need for long-term care Medicaid. For Nursing Home Medicaid and Medicaid Waivers, a Nursing Facility Level of Care (NFLOC) is required. Furthermore, additional criteria may need to be met for specific program benefits. For example, for a Waiver to cover the cost of home modifications, an inability to safely live at home without modifications may be necessary. For long-term care services via the Regular Medicaid program, a functional need with the Activities of Daily Living (ADLs) is required, but a NFLOC is not necessarily required.

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Qualifying When Over the Limits

For South Carolina elderly residents, aged 65 and over, who do not meet the financial eligibility requirements above, there are other ways to qualify for Medicaid.

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1) Qualified Income Trusts (QIT’s) – Also called Miller Trusts, or Income Trusts in SC, QITs offer a way for Medicaid applicants over the Medicaid income limit (called a “Medicaid Cap” in SC) to still become income-eligible for Nursing Home Medicaid or a Medicaid Waiver. For eligibility purposes, money deposited into this type of trust does not count towards Medicaid’s income limit. In simple terms, one’s excess income (over the Medicaid Cap) is directly deposited into a trust, in which a trustee is named, giving that individual legal control of the money. Trust funds can only be used for very specific purposes, such as paying for long-term care services / medical expenses accrued by the Medicaid enrollee. The account must be irreversible, meaning once it has been established, it cannot be changed or canceled, and the South Carolina Department of Health and Human Services must be listed as the remainder beneficiary.

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2) Asset Spend Down – Persons who have countable assets over South Carolina’s asset limit can “spend down” assets on ones that are non-countable. Examples include making home modifications (wheelchair ramps, roll-in showers, and stair lifts), home improvements (replacing faulty electrical wiring, updating plumbing, and replacing old water heaters), vehicle modifications (wheelchair lifts, adaptive control devices, and floor modifications to allow one to drive from a wheelchair), prepaying funeral and burial expenses, and paying off debt. Remember, assets cannot be gifted or sold under fair market value, as this violates Medicaid’s Look-Back Rule. It is recommended one keep documentation of how assets were spent as proof this rule was not violated.

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3) Medicaid Planning – The majority of persons considering Medicaid are “over-income” and / or “over-asset”, but they still cannot afford their cost of care. For these persons, Medicaid planning exists. By working with a Medicaid Planning Professional, families can employ a variety of strategies to help them become Medicaid eligible, as well as to protect their home from Medicaid’s Estate Recovery Program. Connect with a Medicaid Planner.

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Application Process

To apply for the Community Choices Waiver, applicants should contact their local Health and Human Services’ Community Long Term Care (CLTC) office. Offices by location can be found here. The Application for Nursing Home, Residential or In-Home Care can be found here, and the Additional Information for Nursing Home and In-Home Care form can be found here.

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Learn more about Community Choices here. Persons can also call Healthy Connections at 888-549-0820. The South Carolina Department of Health and Human Services (SCDHHS) administers the Community Choices Waiver. 

Prior to applying for long-term care Medicaid in South Carolina, it is imperative that seniors are certain all eligibility requirements are met. Persons who have income and / or resources in excess of the limit(s) can benefit from Medicaid planning for the best chance of acceptance into a Medicaid program. Familiarizing oneself with general information about the application process for long-term care Medicaid can be helpful.

 

Approval Process & Timing

The Medicaid / Healthy Connections application process can take up to 3 months, or even longer, from the beginning of the application process through the receipt of the determination letter indicating approval or denial. Generally, it takes one several weeks to complete the application and gather all of the supportive documentation. If the application is not properly completed, or required documentation is missing, the application process will be delayed. Based on federal law, Medicaid offices have up to 45 days to review and approve or deny one’s application (up to 90 days for disability applications). Despite the law, applications are sometimes delayed even further. Furthermore, as wait-lists may exist, approved applicants may spend many months waiting to receive benefits.

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Prior to applying for long-term care Medicaid in South Carolina, it is imperative that seniors are certain all eligibility requirements are met. Persons who have income and / or resources in excess of the limit(s) can benefit from Medicaid planning for the best chance of acceptance into a Medicaid program. Familiarizing oneself with general information about the application process for long-term care Medicaid can be helpful.

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