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Medicaid Income Eligibility Guidelines

Medicaid is a federally subsidized health insurance program run by state governments. Its mission is to provide basic essential health services for the poor, indigent and children of low-income families. Each state is free to set up its own guidelines for eligibility and design its own programs, within federal guidelines.

  1. Federal Poverty Line

    • Typically, states will define eligibilty for medicaid programs using the federal poverty line as a reference point. The federal poverty line is an estimate of basic subsistence level living expenses required to sustain a family of a given size. For 2011, the federal poverty line for a family of three living in the 48 contiguous United States was $18,530. Alaska and Hawaii have higher poverty lines, reflecting the higher cost of living in these states.

    Programs for Children

    • The states frequently provide generous access to Medicaid benefits for pregnant mothers and mothers of very young children, regardless of asset levels. State officials will frequently allow Medicaid benefits for children below the age of five with income levels above 200 percent of the federal poverty line. As children get older, it becomes more difficult for the family to qualify. Some programs require the family income remain below 120 or 130 percent of the poverty line.

    Nursing Home Programs for the Elderly

    • Medicaid also provides long-term care, custodial care and nursing home services for the elderly. However, prior to qualifying for Medicaid, the elderly must first spend their own assets down to $2,000 to $6,000, depending on the state and their marital assets. Total income allowable from all sources is severely restricted and is generally less than $2,000 per month. However, if only one spouse is in a nursing home, the remaining spouse is frequently allowed a higher income and allowed to retain more assets. Thorough legal planning prior to the need for Medicaid services may allow those affected to shield more assets through the use of special needs trusts, non-countable assets and Medicaid qualified annuities.

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