Iowa’s Medicaid program, run by the Iowa Department of Health and Human Services (DHS) provides many different Medicaid programs for low-income and low-asset Iowa residents. Most of these programs have asset limits and/or income limits. These limits are usually based on the federal poverty level (FPL).
For vendor Medicaid, also known as long-term care Medicaid or nursing facility Medicaid, an individual’s assets must be under $2000. Countable assets for Iowa Medicaid include bank accounts, IRAs, and life insurance policies. Household goods, like clothes, furniture, and jewelry are generally not counted. Exempt assets include one piece of real estate and one vehicle. Although some states do not have an income limit for nursing home Medicaid, Iowa’s limit is $2,982. Additionally, Medicaid beneficiaries cannot keep their monthly income, it must be paid to the care facility as a co-pay, known as a Patient Liability. Countable income streams include Social Security, like SSI and SSDI, pensions, dividends, and wages. There are exceptions for Medicare health insurance premiums and a small personal needs allowance for items and services that the facility does not provide. In addition to financial eligibility, Medicaid applicants must also be medically needy and qualify medically for nursing home care.
For Home and Community Based Services (HCBS) the financial eligibility criteria are similar, however, HCBS programs allow for Medicaid benefits to be utilized at home or in an assisted living facility. It should be noted that unlike vendor Medicaid, HCBS programs are not entitlement programs, meaning that there is usually a wait-list for Medicaid coverage.
In order to achieve financial eligibility for Medicaid, there are many strategies available. A common strategy for those over the asset limit is simply to expend assets, or complete a “spend down”. Assets can be spent on medical care, home improvements, or other items or services, provided it is at fair market value. For those over the income limit, excess income can be funneled to a trust, known as a Miller Trust, qualified income trust, or medical assistance income trust. Other strategies include estate planning and Medicaid annuities. Please contact Qualified Medicaid Care to assist you and your loved one with Medicaid eligibility and learning more about strategies to protect assets and income.