MEDICAID is a joint federal and state program that provides medical assistance for financially eligible persons who are aged, blind, or disabled. Because it is based on financial need, Medicaid has strict income and resource limits.
The following are the important Medicaid numbers to keep in mind for 2025.
INCOME
In 2025, to be eligible from an income perspective, an applicant may have no more than $2,901 in monthly income. (When a Medicaid applicant is married, the income of the applicant’s spouse (called the “community spouse”) does not count in determining the applicant’s eligibility.)
However, if the applicant’s income exceeds $2,901, a Qualified Income Trust may be used to render the applicant income-eligible.
RESOURCES
When a couple is married, Medicaid will consider the resources of both spouses when determining Medicaid eligibility for the applicant: all assets in the wife’s sole name, in the husband’s sole name, and in joint names (either with the spouse or another person) are countable. This includes pension, IRA and retirement assets of the applicant’s spouse.
Keep in mind that some resources are excluded, for purposes of Medicaid eligibility, such as:
- Home
- Automobile
- Personal effects and household goods
- Life insurance with a face value under $1,500
- Medical equipment
- Inaccessible resources
- Irrevocable burial fund
Countable resources may not exceed $2,000 for an individual applicant, and $3,000 for a couple who both apply for Medicaid. All excess resources must be spent down in order to qualify for Medicaid.
PENALTY DIVISOR
To prevent the practice of transferring assets to obtain Medicaid eligibility, Congress enacted legislation to impose periods of ineligibility, or “penalty periods,” in cases in which a Medicaid applicant transferred assets for less than fair market value (made a gift) in an attempt become financially eligible for Medicaid. Medicaid officials will “look back” five years (60 months) from the application date to analyze asset transfers made by the applicant. If a Medicaid applicant has transferred assets for less than fair market value within the 60-month “look-back” period, the applicant is subject to a period of Medicaid ineligibility (a “penalty period”), based upon the value of the uncompensated transfer or gift.
The length of the penalty period is determined by dividing the total assets transferred by what Medicaid calculates as the statewide average cost of nursing home care. Effective April 1, 2024, that amount is $440.10 per day, or $13,386.38 per month.
SPOUSAL ANTI-IMPOVERISHMENT PROVISIONS
The Medicaid rules include provisions designed to avoid impoverishing the applicant’s spouse (the “community spouse”).
With regard to income, the community spouse’s income is not deemed available to the institutionalized spouse to pay for his or her cost of care. In addition, the community spouse is entitled to a Minimum Monthly Maintenance Needs Allowance (“MMMNA”) of $2,555 per month effective July 1, 2024. The community spouse’s income is subtracted from the MMMNA amount, and the balance may come from the income of institutionalized spouse’s income. The community spouse may also be entitled to an excess shelter allowance if his or her shelter expenses (rent, mortgage, taxes, insurance, utilities) exceed $766.50 per month. When calculating the amount of shelter expenses, the standard utility allowance of $878.00 per month (effective October 1, 2024) is utilized when the community spouse directly incurs utility charges.
With regard to assets, the community spouse is entitled to a Community Spouse Resource Allowance (“CSRA”) equal to one-half of the couple’s countable assets, subject to a minimum of $ 31,584 and a maximum of $ 15,7920 (in 2025).