If you need long-term care and cannot afford to pay for either the actual care you need or any form of insurance or annuity protection, you will need to apply for coverage under the Medicaid program. This program is designed to provide managed care to people who are disabled or age 65 or older and have income and assets that fall below certain federal and state thresholds.

It is often very difficult to qualify for Medicaid, but the following steps can help determine if you are eligible and improve your odds of obtaining coverage.

Learn About Medicaid Asset Limits and Eligibility Requirements

Although Medicaid is federally funded, it is administered at the state level, and each state has its own set of rules and regulations pertaining to this program. The income and asset levels allowed differ from one state to another, so be sure to find out where your balance sheet falls in relation to the threshold. If you are single, you generally cannot have more than $2,000 worth of cash or other assets outside of your personal residence, vehicle and other necessary items unless your state has a higher limit. If you are married and your spouse is still able to live independently (community spouse), he or she is allowed to retain up to 50% of your joint assets. Your single or joint income usually cannot exceed 133% of the federal poverty level, although several states have thresholds above this amount.

You will also have to medically prove you are disabled in most cases, although certain exceptions apply (such as women with breast or cervical cancer or anyone who is diagnosed with tuberculosis). You must also be either a U.S. citizen or have a green card and prove your residency within the state. (Another list of exceptions to these parameters apply, such as those who were victims of human trafficking or are classified by Medicaid as “medically needy.”)

Start the Spend-Down Process

If your assets or income exceed the thresholds for your state, you will need to reduce your estate. You can gift your assets or belongings to your children or another reliable party you can count on to use them on your behalf. You may also be able to create a spend-down trust in some cases, depending on the laws in your state. But this arrangement is non-enforceable on your end and you may lose them permanently if the party you gift them to gets into financial trouble.

Apply for Coverage

There are several ways you can begin applying for Medicaid. You can go to www.medicaid.gov, www.healthcare.gov or the website for your state’s Medicaid agency. If you do not have online access, Medicaid has local eligibility offices in each state where you can file your application, or you can apply over the phone.

One of the most common reasons people are denied coverage is incomplete information on the application. Before you begin filling out the application, gather these documents to submit:

  • Birth certificate or drivers license (to prove your age)
  • Proof of citizenship
  • Documentation of all assets and income
  • Copies of your mortgage, lease, rent payment receipts, utility bills or other documents that prove where you live
  • Medical records documenting your disability
  • Information about any other health insurance coverage you may have

Be sure to check with your particular state to see if they require different or additional documentation.

Get Some Expert Help

Before or during the Medicaid application process, you may want to consult with two experts who can help you increase your chances of getting coverage. The first expert is an attorney who specializes in elder law and thoroughly understands the Medicaid laws in your state. The other person is your financial advisor, who can assist you with creating a Medicaid trust or other gifting actions you need to take.

The Bottom Line

Qualifying for Medicaid is not an easy process. Get all of the help you can from your financial advisor and a qualified elder care attorney before you begin this process to maximize your chances of acceptance. Also be prepared to drastically reduce the size of your acceptable estate through a gifting or donation program to meet the thresholds for your state.

For more information on how to qualify for Medicaid, visit the Medicaid website

(For further reading, see: Medicaid vs. Medicare.)