How to Use the Medicaid Desk Reference
Having a reliable “cheat sheet” for state-specific Medicaid planning figures is essential when advising a client or building a crisis planning case. While some figures are used regularly, others are referenced less often, making it critical to understand not just the numbers themselves, but how and when each applies.
What is the Medicaid Desk Reference?
The Medicaid Desk Reference is a state-specific planning tool designed to help you quickly evaluate eligibility rules and structure an effective spend-down strategy. With a single reference, you can answer common client questions such as:
- How many assets can my client keep?
- How long of a penalty period will my client incur due to a prior gift?
- Is the community spouse eligible for an income shift?
Most states update Medicaid figures multiple times per year, often in January, July, or October, but changes can occur at any time, sometimes without notice. Staying current is critical to avoiding errors and denials.
Divestment Penalty Divisor
This state-specific figure is based on the average private-pay cost of nursing home care. To calculate a penalty period, divide the total amount of gifts made during the five-year lookback by the divisor. The result is the number of months the applicant must privately pay for care before they can begin receiving Medicaid benefits. States may calculate this divisor using monthly or daily rates, and some use multiple divisors.
Individual Resource Allowance
This allowance determines how much a Medicaid applicant may retain in countable assets while still qualifying for benefits. In many states, this amount is a modest $2,000 and intended for personal discretionary needs.
Resource Allowance for a Couple
When both spouses are institutionalized, they are not each entitled to a full individual allowance. Instead, they must share a combined resource allowance, $3,000 in many states, though it may vary by state.
Personal Needs Allowance
This allowance is the portion of an institutionalized individual’s income that may be kept each month for personal expenses such as clothing or toiletries. This amount is excluded from the monthly patient pay obligation. Unused funds are typically counted as assets in subsequent months. The allowance varies by state.
Community Spouse Resource Allowance (CSRA)
When one spouse is institutionalized and the other remains at home, the CSRA determines how many countable assets the community spouse may retain.
- Standard CSRA states require assets above a fixed limit to be spent down.
- Minimum/maximum CSRA states allow the community spouse to retain one-half of the couple’s assets as of the snapshot date, subject to state-imposed minimums and maximums.
Learn More: The Role of Medicaid Compliant Annuities in Preventing Spousal Impoverishment
Monthly Maintenance Needs Allowance (MMNA)
The MMNA establishes the minimum monthly income the community spouse is allowed to keep. If the community spouse’s income falls below this amount, an income shift from the institutionalized spouse may be permitted.
- Standard MMNA states allow an income shift up to a fixed amount.
- Minimum/maximum MMNA states may permit a higher income shift based on excess shelter expenses, subject to a state maximum.
Shelter Standard
This figure represents baseline housing expenses for the community spouse, such as mortgage payments, taxes, and utilities. If actual shelter costs exceed the standard, the MMNA may be increased dollar-for-dollar, up to the state maximum.
Standard Utility Allowance
Rather than using actual utility bills, which can vary month to month, many states apply a standard utility allowance when calculating shelter expenses. This simplifies calculations and varies by state.
Funeral Expense Trust Limit
Irrevocable funeral expense trusts are generally exempt resources if they fall within state limits. Some states impose a cap, while others do not. Many states also require a Letter of Goods and Services to substantiate the trust’s value.
Life Insurance Limit
If a life insurance policy’s face value falls below the state threshold, its cash value is typically considered exempt. Policies exceeding the limit may be treated as countable resources.
Home Equity Limit
For unmarried applicants, states impose a limit on how much home equity may be retained while qualifying for Medicaid. Equity above this limit may be considered countable unless reduced through permitted strategies. Equity is calculated as fair market value minus debts and encumbrances.
As Senior Content Specialist, Katie drafts and edits content across multiple platforms, including blogs, guides, emails, white papers, videos, brochures, website pages, and more. She conducts research and gathers up-to-date information to keep our clients well-informed.
