Understanding Medicaid Eligibility for Long-Term Care: A Legal Overview for Elder Law Attorneys

Medicaid remains a critical component of long-term care planning, particularly for seniors who face the financial burden of nursing home costs. While Medicaid serves a variety of populations, this overview focuses on the eligibility requirements for individuals seeking Medicaid benefits for long-term care coverage.

As attorneys advising older clients and their families, it’s important to recognize the complexities of Medicaid’s financial and non-financial eligibility rules, which vary by state. Most clients who come to you will have too many assets to qualify, and they will likely be unaware that planning opportunities still exist to help them protect what they have left, even if they’re already receiving care.

Read More: How to Protect Clients’ Assets Through Medicaid Planning

Non-Financial Eligibility Requirements

To qualify for long-term care Medicaid, an applicant must:

• Be a U.S. citizen or qualified non-citizen
• Be age 65 or older, blind, or disabled
• Reside in a Medicaid-approved facility

These non-financial requirements must be satisfied before financial eligibility is assessed.

Financial Eligibility: Income and Asset Limits

Medicaid’s financial criteria vary by state and focus on both income and assets. Applicants must fall below certain thresholds to qualify, and planning strategies must account for both components.

Income Rules

Single Applicants: In most states, an applicant’s monthly income, including Social Security, pensions, and other earned/unearned sources, must be less than the private pay rate of the facility. A few states apply a different income limit, such as the facility’s Medicaid reimbursement rate or a different figure.

Married Applicants: The institutionalized spouse is subject to the same income standards as a single applicant. The community spouse, however, is not subject to any income limitations. Joint income is typically divided evenly between the two for eligibility purposes.

Read More: Calculating the Monthly Maintenance Needs Allowance When Medicaid Planning for Married Couples

Asset Rules

Assets are categorized as either exempt or countable for Medicaid eligibility purposes.

Exempt Assets: These do not affect eligibility and include the primary residence (within equity limits), one vehicle, personal belongings, certain life insurance policies (typically with face values under $1,500), and irrevocable funeral expense trusts (generally capped around $15,000, depending on the state).

Countable Assets: These include liquid and non-exempt resources such as bank accounts, investment accounts, additional vehicles or real property, and retirement accounts (though treatment of IRAs varies by state).

Individual Resource Allowance: Most states set the allowable countable asset limit for an individual or institutionalized spouse at $2,000.

Community Spouse Resource Allowance (CSRA): To protect the spouse remaining at home, Medicaid allows them to retain a portion of the couple’s countable assets. The CSRA ranges from $31,584 to $157,920 in 2025, depending on the state, and these figures are updated annually. Some states set a standard amount; others allow for a minimum and maximum allowance.

Read More: Understanding the Medicaid Lookback Period and Its Impact on Asset Transfers

For attorneys, understanding these eligibility requirements is foundational to crafting effective crisis Medicaid planning strategies. From spend-down approaches to asset protection tools, timely legal counsel can ensure clients preserve what they’ve built and receive the care they need.

To access your state’s specific Medicaid rules and planning considerations, log in to your Attorney Access account.