Income Cap for Medicaid Eligibility

The elderly in an income cap state may be able to show more income than those living in other states.

Medicaid is a health care program for the medically needy, elderly and low-income individuals. Medicaid rules are very complex and can vary by state. One way of determining eligibility for the elderly is know as "income cap" eligibility.

Applicability

Individual states decide how they will administer their Medicaid program. States may use one of a number of options when determining eligibility. As of 2010, Alabama, Arkansas, Colorado, Delaware, Idaho, Missouri, Nevada, New Mexico, South Carolina, South Dakota and Wyoming were "income cap" states.

Significance

In an "income cap" state, the participant would otherwise be categorically eligible for Medicaid but for his or her income level. In these states, he or she may use an income level up to three times the benefit amount for a person living at home.

Income Trusts

In states that are "income cap" states, if an applicant's income is above the "cap," he or she may be able to create an income cap trust to reduce the amount of income counted toward eligibility. A trust essentially holds money for the benefit of a beneficiary for use at a later time but the money cannot be accessed at the present time.

References

• The Elder Law Firm: Medicaid
• Senior Law: Medicaid FAQs