Many people rely on Medicaid, also known as Title 19, to pay for their nursing home care or in-home services under the Medicaid Elderly Waiver program. Medicaid is a needs-based program for people who cannot afford the care they need. The financial eligibility rules for nursing home Medicaid and the Elderly Waiver are the same. In general, people are financially eligible for Medicaid for nursing home care if their income in 2026 is $2,982 or less per month and their nonexempt resources are $2,000 or less. In some instances, people with incomes above $2,982 per month may be eligible for Medicaid if they can establish a medical assistance income trust, also known as a Miller Trust. All non-exempt resources count toward the $2,000 limit. Exempt resources that do not affect your eligibility include a car, homestead, household goods, and prepaid funeral plans.
Medicaid eligibility is much more complicated for married people. The Medicaid program allows the spouse who lives outside of the nursing home (the “community spouse”) to have more than $2,000 in resources without disqualifying the spouse who lives in the nursing home from receiving Medicaid. The community spouse’s income does not count toward the $2,982 income limit. In addition, if the community spouse’s monthly income is less than $4,066.50 then part or nearly all the income from the spouse in the nursing home may be kept by the community spouse.
Apply for Medicaid Immediately
Many people fail to apply for Medicaid when they enter a nursing home and wait until most of their assets are gone. This is a big mistake. To receive maximum Medicaid benefits, married individuals should go to the Iowa Department of Health and Human Services (HHS) and apply for Medicaid when one spouse enters a nursing home. HHS will decide how many assets each spouse can keep. All non-exempt resources of the couple are considered to be available to pay nursing home costs, regardless of which spouse owns them. HHS will assign one-half of the nonexempt assets to each spouse, provided the community spouse is assigned a minimum of $32,532 and a maximum of $162,660 (in 2026). HHS will notify the couple that the spouse in the nursing home is not eligible for Medicaid to pay his or her expenses until the spouse in the nursing home has reduced the value of his or her assets to $2,000. Although assets cannot generally be reduced to $2,000 by giving assets away, there are many ways to reduce assets that benefit both spouses.
Appeals May Allow More Assets to be Kept
Couples who have over $32,532 in assets should not assume that the initial DHS decision regarding the attribution of resources is correct. If the couple’s combined income is less than $4,066.50, filing an appeal with DHS may allow additional assets for the community spouse to be set aside. Whether the appeal is granted will depend on the couple’s income, life expectancy, and amount of the original attribution.
Benefits of Appealing Initial DHS Decision
Ben and Vicki Hill are both 84. They each receive $750 in Social Security benefits. They also jointly own a $60,000 home, a $10,000 car, and $60,000 in savings. Ben enters a nursing home and applies for Medicaid to pay Nursing Home expenses.
| Initial DHS decision:•Home – exempt•Car – exempt•Vicki can keep $30,000.•Ben is assigned $30,000 and must spend $28,000 before Medicaid will pay for his nursing home expenses. | Final DHS decision after appeal:•Home – exempt•Car – exempt•Vicki can keep the $60,000 because of her age and limited income.•Ben is eligible for Medicaid to pay for his nursing home care. |
After the final attribution of resources, all of the resources assigned to the community spouse must be placed in the name of the community spouse in order for the resident spouse to maintain eligibility for Medicaid. All exempt resources, such as the home and car, should also be transferred to the community spouse because of Iowa’s Estate Recovery Statute.
The rules for qualifying for Medicaid are often complex and confusing. You may call the Legal Hotline for Older Iowans at 1-800-992-8161 if you have questions or would like more information about Medicaid eligibility.