2024 Income & Asset Limits (2024)

Last updated: December 30, 2023

Kentucky Medicaid Long-Term Care Definition

Medicaid is a health care program for low-income individuals of all ages. While there are many different coverage groups, this page is focused on long-term care Medicaid eligibility for Kentucky senior residents (aged 65 and older). In addition to nursing home care, KY Medicaid pays for non-medical services and supports to help frail seniors live in their homes. There are three categories of Medicaid long-term care programs for which Kentucky seniors may be eligible.

1) Institutional / Nursing Home Medicaid – An entitlement; anyone who is eligible will receive assistance. Benefits are provided only in nursing home facilities.

2) Medicaid Waivers / Home and Community Based Services (HCBS) – Not an entitlement; there are a limited number of participants and waiting lists may exist. Intended to delay nursing home admissions, services and supports are provided at home and in adult day care. More on Waivers.

3) Regular Medicaid / Aged Blind and Disabled – An entitlement; anyone who meets the requirements is able to receive benefits. Various long-term care services, such as personal care assistance or adult day care, may be available.

While Medicaid is jointly funded by the state and federal government, it is administered by the state under federally set parameters. The Kentucky Cabinet for Health and Family Services’ Department for Medicaid Services is the state’s administering agency.

Income & Asset Limits for Eligibility

The three categories of Medicaid long-term care programs have varying financial and medical requirements. Further complicating eligibility is that the financial criteria changes annually, varies with marital status, and that Kentucky offers multiple pathways towards eligibility.

The table below provides a quick reference to allow seniors to determine if they might immediately meet all the criteria for long-term care from a Kentucky Medicaid program. Alternatively, persons might take the Medicaid Eligibility Test. IMPORTANT: If one does not meet all of the requirements, it does not mean they are ineligible or cannot become eligible for Medicaid in Kentucky. More.

*All of a beneficiary’s monthly income, with the exception of a Personal Needs Allowance of $40 / month, Medicare premiums, and possibly a Needs Allowance for a non-applicant spouse, must go towards nursing home costs. This is called a Patient Liability.
†Based on one’s living setting, a program beneficiary may not be able to keep monthly income up to this level.
‡While the income limit is very low, SSI recipients are automatically eligible for Regular Medicaid. In 2024, this means an individual can have income up to $943 / month, and a couple, up to $1,415 / month. The asset limit remains $2,000 for an individual and $3,000 for a couple.

Income Definition & Exceptions

Countable vs. Non-Countable Income
Nearly any income from any source that a Medicaid applicant receives is counted towards Medicaid’s income limit. This includes cash from family and friends, employment wages, alimony payments, pension payments, Social Security Disability Income, Social Security Income, IRA withdrawals, and stock dividends. Nationally, Holocaust restitution payments are not counted as income. Furthermore, in KY, the VA (A&A) Pension, which is above and beyond the Basic VA Pension, does not count as income. One exception exists: A&A is countable income for veterans who live in state-operated VA nursing facilities that accept Medicaid.

Treatment of Income for a Couple
When only one spouse of a married couple applies for Nursing Home Medicaid or a Medicaid Waiver, only the income of the applicant is counted. This means the income of the non-applicant spouse is disregarded and does not impact the income eligibility of their spouse. The non-applicant spouse, however, may be entitled to a Minimum Monthly Maintenance Needs Allowance (MMMNA). The MMMNA is a Spousal Impoverishment Rule and is the minimum amount of monthly income a non-applicant spouse is said to require to avoid living in poverty.

The MMMNA is $2,465 (eff. 7/1/23 – 6/30/24). If a non-applicant’s monthly income falls under $2,465, income can be transferred to them from their applicant spouse, bringing their income up to this level. In Kentucky, a non-applicant spouse can further increase their Spousal Income Allowance if their housing and utility costs exceed a “shelter standard” of $740 / month (eff. 7/1/23 – 6/30/24). However, in 2024, a Spousal Income Allowance cannot push a non-applicant’s total monthly income over $3,853.50. This is the Maximum Monthly Maintenance Needs Allowance. More on how this allowance is calculated.

Income is counted differently when only one spouse applies for Regular Medicaid; the income of both the applicant spouse and the non-applicant spouse is calculated towards the applicant’s income eligibility. Furthermore, there is no Monthly Maintenance Needs Allowance for a non-applicant spouse. More on how income is counted.

Asset Definition & Exceptions

Countable vs. Non-Countable Assets
The value of countable assets are added together and counted towards Medicaid’s asset limit. Countable assets include cash, stocks, bonds, investments, bank accounts (credit union, savings, and checking), pension funds, and real estate in which one does not reside. Other assets are considered exempt (non-countable). Exemptions include personal belongings, household furnishings, an automobile, and generally one’s primary home. In Kentucky, IRA’s / 401K’s are also exempt.

Treatment of Assets for a Couple
All assets of a married couple are considered jointly owned. This is true regardless of the long-term care Medicaid program for which one is applying and regardless of if one or both spouses are applicants. However, Spousal Impoverishment Provisions permit the non-applicant spouse of a Medicaid nursing home or Waiver applicant a Community Spouse Resource Allowance (CSRA). In 2024, the non-applicant spouse (the community spouse) can retain 50% of the couple’s assets, up to a maximum of $154,140. If the non-applicant’s portion of the assets is under $30,828, 100% of the assets, up to $30,828 can be retained by the non-applicant.

Medicaid’s Look-Back Rule
Kentucky has a 60-month (5-year) Medicaid Look-Back Period that immediately precedes the date of one’s Nursing Home Medicaid or Medicaid Waiver application. During the “look back”, Medicaid checks all asset transfers to ensure none were gifted or sold under fair market value. This rule is intended to discourage persons from gifting assets to meet Medicaid’s asset limit. If one violates the Look-Back Period, even unintentionally, a Penalty Period of Medicaid ineligibility will be calculated. Note that there is no Look-Back Period for Regular Medicaid applicants.

The U.S. Federal Gift Tax Rule does not extend to Medicaid eligibility. In 2024, this rule allows one to gift up to $18,000 per recipient without filing a Gift Tax Return. Gifting under this rule violates Medicaid’s Look-Back Period.

Kentucky Medicaid Home Exemption Rules

For home exemption, the Medicaid applicant or their spouse must live in their home. If there is no spouse in the home, there is a home equity interest limit of $713,000 (in 2024). Home equity is the value of the home after subtracting any outstanding debt against it. Equity interest is the amount of home equity owned by the applicant. Furthermore, if there is not a spouse in the home, and the Medicaid applicant does not live there, the applicant must have Intent to Return. There is no home equity limit for Regular Medicaid applicants. Other exemptions exist.

While one’s home is generally exempt from Medicaid’s asset limit, it is not exempt from Medicaid’s Estate Recovery Program. Following a long-term care Medicaid beneficiary’s death, Kentucky’s Medicaid agency attempts reimbursem*nt of care costs through whatever estate of the deceased still remains. This is often the home. Without proper planning strategies in place, the home will be used to reimburse Medicaid for providing care rather than going to family as inheritance.

Medical / Functional Need Requirements

An applicant must have a medical need for Medicaid long-term care. For Nursing Home Medicaid and Medicaid Waivers, a Nursing Home Level of Care (NHLOC) is required. Furthermore, for some program benefits, additional eligibility criteria may be required. As an example, for respite care, an inability to be left unsupervised might be necessary. For long-term care services via the Regular Medicaid program, a functional need with the Activities of Daily Living (ADLs) is required, but a NHLOC is not necessarily required.

Qualifying When Over the Limits

Kentucky senior residents (aged 65 and over) who do not meet the financial eligibility requirements above can qualify for Medicaid in other ways.

1) Medically Needy Pathway – Kentucky has a Spend Down Program that allows Regular Medicaid / Aged Blind and Disabled applicants who have income over Medicaid’s income limit to still become income-eligible. This program allows seniors to “spend down” their income on medical bills, such as Medicare premiums, prescription drugs, physician visits, and hospitalizations. In 2024, the Medically Needy Income Limit (MNIL) in KY is $235 for an individual and $291 for a couple. The amount that must be “spent down” is the difference between one’s monthly income and the MNIL. This can be thought of as a deductible. In KY, the spend down is calculated for a 3-month period. Once one has met their “spend-down” for the period, they will receive Medicaid benefits for the remainder of the period. The Medically Needy Asset Limit is $2,000 for an individual and $4,000 for a couple.

2) Qualified Income Trusts (QIT’s) – Also called Miller Trusts or Qualifying Income Trusts, these trusts offer a way for individuals over the Medicaid income limit to still become income-eligible for Nursing Home Medicaid or a Medicaid Waiver. Money deposited into a QIT does not count as income for Medicaid eligibility purposes. Overly simplified, income over Medicaid’s income limit is deposited into an irrevocable trust. Irrevocable means that the terms of the trust cannot be changed or canceled. A trustee is named to manage the trust, giving that individual legal control of the trust funds. Funds can only be used for very specific purposes, such as paying medical expenses accrued by the Medicaid enrollee.

3) Asset Spend Down – Persons who have assets over Medicaid’s asset limit can “spend down” assets on non-countable ones and become asset-eligible. This can be done by making home modifications (i.e., addition of wheelchair ramps, stair lifts, and walk-in showers), prepaying funeral and burial expenses, and paying off debt. Remember, assets cannot be gifted or sold under fair market value. Doing so violates Medicaid’s Look-Back Rule. It is recommended one keep documentation of how assets were spent as proof this rule was not violated.

4) Medicaid Planning – The majority of persons considering Medicaid are “over-income” and / or “over-asset”, but they still cannot afford their cost of long-term care. For these seniors, Medicaid planning exists. By working with a Medicaid Planning Professional, families can employ a variety of strategies to help them become Medicaid-eligible, as well as to protect their home from Medicaid’s Estate Recovery Program. Connect with a Medicaid Planner.

Specific Kentucky Medicaid Programs

In addition to paying for nursing home care, Kentucky Medicaid offers the following programs relevant to the elderly that help them to live at home.

1) Home and Community Based (HCB) Waiver – This Waiver replaced the Kentucky Waiver for the Aged. Benefits may include personal care assistance, adult day health care, respite care, and meal delivery, among others. Program participants are able to hire the caregiver of their choosing, including family members, such as adult children and spouses.

2) Program of All-Inclusive Care for the Elderly (PACE) – Through PACE, the benefits of Medicare and Medicaid, including long-term care, are available via one program. Additional benefits, such as dental and eye care, may be available.

3) Money Follows the Person – Also called Kentucky Transitions in KY. This federal program helps institutionalized persons who are eligible for Medicaid to transition back home or into the community.

How to Apply for Kentucky Medicaid

Senior Kentucky residents can apply for Medicaid online at kynect benefits or in person at their local Department for Community Based Services (DCBS) office. For Medicaid related questions or help with the application process, persons can call DCBS at 1-855-306-8959. The application process may vary based on program for which one is applying.

It is vital that Kentucky applicants are confident that they meet all of the eligibility criteria before submitting a Medicaid application. For seniors who don’t meet the requirements, or are unsure, it is recommended they participate in Medicaid Planning. Applying for long-term care Medicaid can be a lengthy process that is stressful and complicated. Familiarizing oneself with general information about the application process for long-term care Medicaid can be helpful.