How Medicaid decides who gets coverage

Medicaid looks at three main things: your income, your assets, and your household size. Each state sets its own limits, so what qualifies you in one state may not in another. You do not need to guess — your state Medicaid office or a local community health center can tell you in one conversation whether you meet the thresholds.

The process is straightforward: you report your monthly income and what you own, the program compares those numbers to the state's limits, and you either meet them or you do not. There is no points system or judgment call. If your numbers are below the line, you move forward. If they are above it, you do not may have access to through the standard path — though some states have other routes for people just over the limit.

Key Takeaways

  • Income limits vary by state and household size; a single person might may have access to at $1,500 per month in one state and $2,000 in another.
  • Asset limits also differ by state, but most cap what you can own at $2,000 to $3,000 for an individual, not counting your home or car.
  • You will need to report your last two months of pay stubs, tax returns, and a list of bank accounts and savings to verify your numbers.
  • Your state Medicaid office or 211 can tell you the exact limits for your household in minutes without requiring any formal submission.

Income limits and how they are calculated

Your gross monthly income — what you earn before taxes — is what Medicaid counts. This includes wages, self-employment income, Social Security, unemployment benefits, child support, and pension payments. Some income does not count: for example, Supplemental Security Income (SSI) is usually excluded, and some states do not count certain types of child support.

Income limits are set as a percentage of the federal poverty line and change each year. For 2024, the federal poverty line for a single person is roughly $1,600 per month, and most states set their Medicaid limit between 100% and 200% of that figure. A state at 138% of poverty would cover a single person earning up to about $2,200 per month. A state at 100% would cover someone earning up to about $1,600. Your state's exact number is published on its Medicaid website, usually in a table organized by household size.

If you are self-employed, Medicaid counts your net income after business expenses. If you receive irregular income — seasonal work, freelance pay, bonuses — most programs average your income over the past three months or use your most recent month, depending on the state. Report what you actually expect to earn going forward, not what you earned in a single good month.

Asset limits and what counts

Most states cap the total value of assets you can own and still may have access to for Medicaid. The limit is usually $2,000 for an individual and $3,000 for a couple, though some states have raised or lowered these amounts. Assets include bank accounts, savings accounts, money market accounts, stocks, bonds, and cash on hand. A car and your primary home do not count toward the limit in most states.

Retirement accounts like IRAs and 401(k)s are typically not counted as assets if you have not yet reached retirement age. Once you turn 59½, some states begin counting them. Life insurance policies and burial accounts up to a certain amount (usually $1,500 to $3,000) are also excluded in most states.

If you are over the asset limit, you cannot simply give money away to a family member and then report a lower balance. Medicaid asks for bank statements from the past two to three months and will see the transfer. Some states have a "look-back" period of up to five years for certain transfers. If you have recently received an inheritance or settlement, report it honestly — trying to hide it can result in denial or recovery of benefits already paid.

Special rules for elderly and disabled adults

If you are 65 or older or have a disability recognized by Social Security, some states offer Medicaid Expansion or Medicaid Buy-In programs with higher income limits. These programs exist because elderly and disabled people often have higher medical costs, and states recognize that a standard income limit would leave them uninsured.

For example, a state might allow a disabled person to earn up to $2,500 per month instead of the standard $1,600 limit. Some states also allow disabled workers to keep more assets — up to $10,000 instead of $2,000. These programs are not automatic; you have to ask for them by name when you report your information. Your state Medicaid office can tell you whether your state offers one and whether you meet its requirements.

How to find your state's exact limits

The fastest way is to call your state Medicaid office directly. Most states have a single phone line that routes to your county office. You can also visit your state's Medicaid website, which publishes income and asset limits in a table format. Search "[your state] Medicaid income limits" to find the page.

If you do not want to call or navigate a website, dial 211 from any phone. This free service connects you to local health and human services, and the counselor can tell you your state's limits and whether your household meets them. They can also tell you whether your state has expanded Medicaid or offers special programs for your situation. The call takes about five minutes.

Write down your household size, your total monthly income, and your total assets before you call. Having these numbers ready means you can get an answer on the spot instead of being asked to call back.

What happens if your income or assets are slightly over the limit

If you are just over the income or asset limit, you have a few options depending on your state. Some states allow a small "income disregard" — they subtract a set amount from your income before comparing it to the limit. For example, a state might disregard the first $65 of monthly income, so if you earn $1,665 and the limit is $1,600, you would be counted as earning $1,600.

Other states offer Medicaid Spend-Down programs. If you are over the asset limit, you can spend down to the limit by paying medical bills, home repairs, or other allowed expenses. Once you reach the limit, you become may be able to access. Some states allow you to set aside money in a special account (called a ABLE account or pooled trust) that does not count toward the asset limit if you have a disability.

If none of these apply to you, you may still be able to get coverage through a different program. Some states offer Medicaid for people with specific conditions — like pregnancy or HIV — regardless of income. Others have separate programs for working people with disabilities. Your state Medicaid office can walk you through these alternatives.

Documents you will need to verify your information

When you report your income and assets, Medicaid will ask you to prove what you said. Have these documents ready: your last two months of pay stubs, your most recent tax return, a list of all bank accounts with current balances, and proof of any other income (Social Security statement, pension letter, unemployment award letter). If you are self-employed, bring your business tax return and a current profit-and-loss statement.

For assets, you will need recent bank statements — usually from the past month or two — showing the account balance. If you own a car, you may need the registration and a statement of its value. If you own property other than your home, bring the deed or property tax statement. Most of these documents can be uploaded online or emailed to your Medicaid office; you do not have to mail originals.

Frequently Asked Questions

Does my spouse's income count if we are married but file taxes separately?

Yes. Medicaid counts the income of your spouse regardless of how you file taxes. If you are married and living together, both incomes are added together and compared to the household limit for two people. Some states allow married couples to be treated as separate cases if one is institutionalized or if you meet other specific conditions — ask your Medicaid office whether this applies to you.

What if I am unemployed and have no income right now?

You likely meet the income limit. Medicaid counts zero income as below the limit in every state. You will still need to report your assets and household size, and you may be asked to show that you are actively looking for work or receiving unemployment benefits. Bring documentation of your job search or your unemployment award letter.

Do I have to report money I receive from family members as income?

Gifts from family members are not counted as income. However, if a family member gives you money regularly — for example, $500 every month — Medicaid may count it as income depending on your state and whether there is a written agreement. Report it honestly and let Medicaid decide. If it is a one-time gift, it counts as an asset instead, which affects your asset limit but not your income limit.

Can I own a second car and still may have access to?

Most states exclude one vehicle from the asset limit, but a second car counts toward your total assets. If your second car is worth $3,000 and your state's asset limit is $2,000, you would be $1,000 over the limit. Some states allow you to exclude a second vehicle if it is necessary for work or medical treatment — ask your Medicaid office whether this exception applies in your state.

What if my income changes after I am approved?

You must report changes in income within 10 days in most states. If your income goes up and you exceed the limit, your coverage will end. If it goes down, you stay covered and your case is updated. Keep your Medicaid office informed of job changes, raises, or loss of income to avoid overpayments or unexpected termination of coverage.