What If My Income Is Too High for Full Dual Eligibility?

People who qualify for both Medicare and full Medicaid benefits have what’s known as “full dual eligibility.” While Medicare eligibility doesn’t depend on income, Medicaid eligibility is based partly on income and varies by state.

If you meet the requirements for Medicare enrollment, yet your income is higher than your state’s Medicaid limit, full dual eligibility may be out of reach. But fortunately, you’re not out of options. There are still programs and strategies that can help you manage your health care costs and get access to expanded benefits. Let’s take a look.

Options If Your Income Is Too High for Medicaid

What if my income is too high for Medicaid?

You may be able to qualify for Medicaid benefits through one of the pathways below. 

1. Spend-down programs

A Medicaid spend-down program is designed to help people with high medical expenses qualify for Medicaid, even if their income is too high. A spend-down program may also be called an “excess income program,” “surplus income program,” or “medically needy program.”

Here’s how it works: You submit proof of medical expenses—like hospital bills, prescriptions, or doctor visits—to your state’s Medicaid office. These costs are subtracted from your monthly income. If the adjusted amount falls below your state’s Medicaid income limit, you qualify for coverage that month.

For example: Robert, age 68, has Medicare and lives in a state where the Medicaid income limit is $1,800 a month. His monthly income is $2,150, putting him $350 over the limit. After deducting $425 in qualifying medical expenses, Robert’s countable income falls to $1,725—below the Medicaid limit. This allows him to qualify for Medicaid and get help with additional health care costs he couldn't afford on his own.

Not all states offer spend-down programs. Check with your local Medicaid office to see if your state participates. Find your local Medicaid agency here.

2. Buy-in programs for working people with disabilities

If you’re under 65 and have a disability or chronic condition, and you’re over your state’s Medicaid income limit, a Medicaid buy-in program could give you a path to dual eligibility.

What is a Medicaid buy-in program? It allows people with disabilities to "buy into" Medicaid by paying a monthly premium. Available in 47 states, buy-in programs help bridge the gap known as the “Medicaid cliff,” where working adults with disabilities lose Medicaid just because they earn a little more. If you qualify, you get access to valuable benefits while continuing to work and maintain your independence.

3. Asset reallocation or exclusions

Medicaid eligibility isn't just about income—it also includes asset limits. Assets refer to the resources or property you own that can be used to pay for care or living expenses.

Not all assets count toward Medicaid limits. Here are some assets that may be excluded when determining Medicaid eligibility:

Some people shift countable assets into these exempt categories to meet Medicaid’s limits. For instance, if someone has savings that put them over the asset cap, they may be able to use that money to pay off their mortgage or buy a burial policy.

Note: Medicaid has a “look-back” period that may affect your ability to shift your assets and still qualify for benefits. This is a 60-month (five-year) period in which Medicaid reviews your financial history to ensure you haven't intentionally transferred assets to meet the asset limit. If the state determines assets were given away (or sold for less than fair market value), a penalty period may be applied that would delay your Medicaid eligibility.

Also, certain types of income—like Supplemental Security Income (SSI)—may not be counted toward your Medicaid limit. Talk to a local benefits counselor or elder law attorney to learn more about how your state’s Medicaid agency counts income and assets.

 

What are other options for getting Medicaid benefits?

Even if your income is too high for full Medicaid, you may still be eligible for programs that help with Medicare costs.

1. Medicare Savings Programs (MSPs). Medicare Savings Programs are Medicaid-administered programs that help people with limited income pay for certain out-of-pocket Medicare expenses. These programs make you partially dual eligible.

Types of MSPs include:

Enrollment in an MSP can greatly reduce your out-of-pocket health care costs, which is important if you’re on a tight budget.

2. State-specific Medicaid waivers. Nearly all states offer Home and Community-Based Services (HCBS) waivers, which have more flexible income and asset limits than traditional Medicaid. These waivers help older adults stay in their home or within the community rather than moving into a nursing home. They can cover a combination of standard medical services and non-medical services, including home health aide, case management, transportation, and meal delivery.

Medicaid waiver programs differ by state and often have limited enrollment slots. Some operate on a first-come, first-served basis, while others are need-based. It’s important to apply early through your state’s Medicaid agency. If waivers are not available, you may be placed on a waitlist.

3. PACE: Program of All-Inclusive Care for the Elderly. PACE may be a good option if you’re 55 or older, need a high level of care, and want to stay in your community instead of moving to a nursing home or other facility. This program covers all Medicare Parts A, B, and D benefits; all Medicaid-covered services; and any additional care or support your care team feels you need to maintain or improve your health. This might include social services, transportation, caregiver support, and in-home care. The average age of PACE participants is 76 with several complex health conditions, cognitive or physical limitations, and substantial health care and long-term care needs. About 90% of participants are dually eligible for Medicare and Medicaid.1

Belinda Allen, a PACE participant since 2006, had this to say about PACE:  "The PACE Program is excellent. Any time anyone needs help, they are there, and the staff is so friendly and caring. Oh, don't forget the food! So good. My counselor was also by my side during my grieving, and I am so grateful.”

You do not need to be enrolled in Medicare or Medicaid to be eligible for PACE services, and there are no specific financial requirements. But you cannot be enrolled in certain programs (e.g., Medicare Advantage) and qualify for these services.

Frequently asked questions (FAQ)

Can I qualify for Medicaid if my income is too high?
You might. Depending on your state and circumstances, you may qualify through a Medicaid spend-down program, a Medicaid buy-in program for working people with disabilities, or a Home and Community-Based Services (HCBS) waiver. You may also qualify for one of the four Medicare Savings Programs (MSPs). These programs help pay Medicare costs without providing full Medicaid coverage.

How does a Medicaid spend-down program work?
A Medicaid spend-down program allows certain people to subtract qualifying medical expenses from their income. Once your countable income falls to your state’s Medicaid limit, you may qualify for coverage for a specific period. Eligible expenses may include doctor bills, hospital care, prescription drugs, health insurance premiums, and other medically necessary services. The rules for spend-down programs may be a bit different in every state.

What is the Medicaid five-year look-back period?
The Medicaid five-year look-back period is the 60 months before you apply for certain long-term care benefits during which Medicaid reviews financial transactions. If you gave away assets or sold them for less than fair market value, Medicaid may impose a penalty period that delays coverage. Since the rules are complex, it’s a good idea to talk to an elder law attorney before transferring or reallocating any of your assets.

Seek the help of a trusted Medicare or Medicaid expert
If your income is too high for Medicaid and dual eligibility, don’t give up. There are other ways to reduce your health care costs and access services that can help you stay healthy and age well.

Keep in mind programs vary across states, and eligibility rules can be complicated. That’s why it’s a good idea to have a benefits counselor or elder law attorney help you navigate your options. You can also contact your State Health Insurance Assistance Program (SHIP), which provides free, unbiased counseling to Medicare and Medicaid enrollees—including dual eligibles.

“Even if your income is too high for traditional Medicaid, there may still be ways to get help with your health care costs,” advised Ryan Ramsey, NCOA Associate Director of Health Coverage and Benefits. “Explore every available pathway and consider speaking with a benefits counselor or other qualified professional. The right guidance can help you protect your health and financial well-being.”

Source

1. National PACE Association. Eligibility Requirements. Found on the internet at https://www.npaonline.org/eligibility-requirements