Generally, if the applicant’s income is more than the facility’s private pay rate, the applicant will not be eligible for Medicaid. Otherwise, income won’t prevent a nursing home resident from becoming eligible for Medicaid.
Once eligible for Medicaid, all of the nursing home resident’s income less certain deductions must be paid to the nursing home. These deductions include a $30/month personal needs allowance, a deduction for any uncovered medical costs (including medical insurance and Medicare supplemental insurance premiums). For married residents, there is also a deduction allowed for an allowance payable to the spouse still living at home. The amount of this spousal allowance will depend on each spouse’s income. A calculator for this allowance is found here.
Medicaid only considered the income of the applicant and not that of the community spouse (the spouse still living at home). For this, Medicaid uses a “name on the check” rule for determining income and if income comes to the community spouse’s name, it is disregarded. Thus, even if the community spouse is working or has a large monthly retirement pension, he or she will not have to contribute to the cost of care of the spouse in the nursing home who is covered by Medicaid.
North Carolina is not considered to be an “income cap” state. Those states set a hard limit on income and prevent Medicaid eligibility when the resident’s income exceeds that limit regardless of other medical expenses. In those states, income can be diverted into a “(d)(4)(B)” or “Miller” trust to permit qualification.