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Writer's picturePaul B. Plant

How Does Medicaid Treat Income

Updated: Jun 30, 2023

The basic Medicaid Rule for nursing home residents is that they must all of their income, minus certain deductions, for their care. These deductions include a $60.00 per month personal needs allowance, a deduction for any uncovered medical cost (including medical insurance premiums) and, in case of a married applicant, an allowance for the spouse that continues to live at home if her or she needs income support. A deduction may also be allowed for a dependent child living at home.


In determining how a Medicaid applicant’s income affects his or her eligibility for nursing home coverage, Tennessee is among the states that set a hardline on the income permissible to qualify for Medicaid. In Tennessee, known as an “income gap” state, eligibility for Medicaid benefits is barred if the nursing home resident’s income exceeds $2,250.00 per month (for 2018), unless the excess income above this amount is paid into a “(D)(4)(B)” or a Miller Trust.

If you need more information on such trusts, contact us we will be glad to assist you.


For Medicaid applicants who are married, the income of a healthy spouse living in the community (“community spouse”) is not counted in determining the Medicaid applicant’s eligibility. Only income in the applicant’s name is counted in determining his or her eligibility. Thus even if the community spouse is still working and earning say, $5,000.00 a month, the community spouse will not have to contribute to the costs of caring for the institutionalized spouse in a nursing home if the institutionalized spouse is covered by Medicaid.

Our law firm has years of experience counseling with folks concerning financial qualification for Medicaid. If we can be of help to you, we certainly would covet that opportunity.

 

Paul B. Plant, Esq., Harwell & Plant

225 Mahr Ave., Lawrenceburg, TN, 38464

Open: Monday – Thursday 9AM – 5PM | Friday 9AM – 3PM

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