Income Requirements
Income Limits
Medicaid also enforces income limits as part of its eligibility criteria. In 2025, the federal limit is $2,901 per month. However, due to the high costs of nursing home care, states have enacted pathways for applicants in excess of the limit to still qualify for benefits, so long as their cost of care exceeds their income. Functionally, this means the true limit to qualify for benefits is the person's actual cost of long-term care.
Medicaid Co-Pay
Once eligible, the individual's income is subject to the nursing home, and they will be responsible for a monthly co-pay. This is calculated by deducting any allowance expenses from their gross monthly income. These expenses include any outstanding medical expenses, a Monthly Maintenance Needs Allowance, and a Personal Needs Allowance, which is a small monthly stipend allotted for miscellaneous expenses.
Qualified Income Trusts
If the individual has too much income, one mechanism for qualifying for Medicaid is the use of a Qualified Income Trust, also known as a Miller Trust. This simple trust allows Medicaid recipients to fund their excess income into the trust, and the trustee, in turn, uses those funds to satisfy their Medicaid co-pay and any other allowable monthly expenses.
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Monthly Maintenance Needs Allowance
It's a common myth that the spouse at home must use their income to support their spouse in the nursing home. In fact, the opposite is true. If the spouse at home, known as the community spouse, has monthly income below a certain threshold, some or all of the institutionalized spouse's income can be allocated to the spouse at home. This is part of Medicaid's spousal impoverishment rules which are designed to support the financial well-being of the spouse still residing in the community.
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