Medicaid Asset Limits and Eligibility Requirements

Mar 26, 2023 By Kelly Walker

While Medicaid is financed at the federal level, it is handled at the state level, and each state has its laws and regulations governing this program. Since the permissible amounts of income and assets vary from state to state, you need to determine where your income and assets stand regarding the threshold so that you may file for bankruptcy. Outside of your primary residence, vehicle, and other necessities, the general rule is that a single individual may not have more than $2,000 in liquid assets at any one time; however, this amount may be higher in certain states.

If you are wedded, and your spouse can still live independently, they are permitted to keep 50% (or, in certain jurisdictions, 100%) of your joint assets up to a threshold of $130,380 as of January 2021. But, if you are unmarried, your spouse cannot retain your joint assets. Your income, whether as a single person or a couple, must normally exceed 138 percent of the federal poverty line; however, some states have higher restrictions than this figure.

You will almost always be required to provide medical documentation to support your claim that you are handicapped. Nonetheless, there are a few notable exceptions to this rule. In addition, you must demonstrate that you are a resident of the state and either a citizen of the United States or possess a green card.

Start the Spend-Down Process

If the limits for your state are exceeded by either your assets or your income, you will be required to decrease the size of your estate. You may leave your assets and possessions to your children or another responsible individual you can trust to utilize them on your behalf, provided you plan at least five years (or thirty months in California).

Depending on the regulations in your state, you may also be allowed to establish a spend-down trust under certain circumstances. But, because of the constraints of this structure, it will not be possible to leave any monies in the trust to a family member when one of the beneficiaries passes away.

Apply for Coverage

You may start the Medicaid application process in several different ways. You may get more information by visiting,, or the website for the Medicaid agency in your state. If you are unable to submit your application online, there are local eligibility offices located in each state that accept Medicaid applications. Instead, you may submit your application over the phone.

Incomplete information on the application is one of the most prevalent reasons individuals are not approved for coverage. Get the following materials to send with your application before you start filling it out:

  • Documentation such as a birth certificate or a driver's license
  • Evidence of citizenship
  • Proof of every asset and source of income
  • Copy any papers verifying where you reside, such as your mortgage, lease, rent payment receipts, utility bills, or other similar documents.
  • Details on any other health insurance plans that you could be enrolled in

Future Work Requirements and Medicaid

In April of 2021, President Biden started the process of dismantling the efforts made by the previous administration to develop and execute additional qualifying conditions for those who do not have dependent children or individuals with disabilities. These restrictions would have allowed states to deny Medicaid coverage to childless persons who are not handicapped, do not have employment, and do not participate in work-related or volunteer-related activities. Since federal courts found the restrictions unconstitutional, not even the states that had gotten permission could implement the job requirements as of April 2021.

President Biden's 2021 American Rescue Plan includes increased matching money from the federal government as an incentive to persuade states to expand Medicaid. Work requirements have been removed from the Medicaid programs in Arizona, Arkansas, Michigan, Utah, New Hampshire, Indiana, Ohio, South Carolina, and Wisconsin due to action taken by the United States Department of Health and Human Services. After first getting approval, Kentucky and Nebraska withdrew their proposals for labor requirements.

At least 15 states requested or were granted permission to implement work requirements under the previous administration, according to the Pew Charitable Trusts. According to the findings of the independent research and advocacy Center for Budget and Policy Priorities, in 2018, Arkansas removed more than 18,000 Medicaid recipients from the rolls because they did not fulfill the new eligibility conditions.

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