Denied for Medicaid? What to Do Next

Getting a denial notice after weeks or months of paperwork is discouraging, but a denial is often not the final word. Many Long-Term Care Medicaid denials are for reasons that can be fixed: a missing document, an asset slightly over the limit, income just over the cap, or a misunderstanding about a transfer. Others can be challenged at a fair hearing. This guide explains how to read a denial notice, the most common reasons for denial, and the choice between reapplying and appealing.

Figures change periodically. Double-check current amounts before relying on them.

Step 1: Read the notice carefully

A denial notice must be in writing and must explain:

the decision (denied, approved with a penalty, approved from a later date, and so on);
the reason, with the rule the state relied on;
the right to request a fair hearing and the deadline to do so;
how to request a hearing;
in many cases, that free legal help may be available.

Note the date on the notice and the appeal deadline. Under federal rules, states must allow a reasonable time to request a hearing, no more than 90 days from the date the notice is mailed. Many states set a shorter deadline, sometimes 30 days or less. If you are not sure, act quickly.

Step 2: Identify the reason

Common reasons for denial include:

Failure to provide verification

The most common reason. The state asked for a document and did not receive it by the deadline (or did not receive all of it). Fix: send the missing item right away. Ask whether the state will reopen the application or whether you must reapply or request a hearing. Some states will reopen if the documents arrive within a short period after the denial.

Assets over the limit

The state counted assets above the limit. Possible fixes: check whether the state counted something that should be exempt (for example, an irrevocable funeral plan, a car, a home with an intent to return, or a retirement account treated a certain way in your state). If assets really are over the limit, plan an allowed spend-down and reapply in the month eligibility can be met. See Allowed spend-down and Exempt assets.

Income over the limit

In income-cap states, the applicant’s gross income was above the cap. Fix: set up and fund a Qualified Income (Miller) Trust, then reapply. In medically needy states, check that care costs were counted correctly against income. See Income limits by state.

Not meeting the level of care

The assessment found the person does not need a nursing-home level of care (or the level required by the program). Fix: request a hearing if the assessment missed important needs, and gather medical records and statements from caregivers and doctors. If the person’s condition has worsened, ask for a new assessment. See Level of care.

A transfer penalty

The state found a gift or sale below fair value in the look-back period and imposed a penalty period. This is technically an approval with a penalty, not a denial of eligibility, but it means Medicaid will not pay for long-term care for a time. Possible fixes: show the transfer was for fair value or for another purpose, show it was exempt, have the money returned, or ask for a hardship waiver. See Penalty period, Exempt transfers and Curing a transfer.

Home equity over the limit

If the applicant’s equity in the home is over the state’s limit and no spouse or dependent child lives there, the state may deny long-term care coverage. Possible fixes: a reverse mortgage or home equity loan, a sale, or transfer to an exempt person. See Over the home equity limit.

Residency, citizenship or other procedural reasons

The state could not confirm residency, citizenship or immigration status, or the application was missing a signature. Fix: provide the missing proof or signature.

Step 3: Decide whether to reapply or appeal

Reapplying makes sense when the denial was correct based on the facts at the time, but the facts have changed or can be changed: assets have been spent down, a Miller trust has been funded, or a missing document is now available. A new application is usually faster than a hearing in these cases. Remember that a new application has a new filing date, which affects retroactive coverage.

Appealing (requesting a fair hearing) makes sense when the state made a mistake: it counted an exempt asset, misread a document, valued property wrongly, treated a fair-value payment as a gift, or ignored an exemption. An appeal can preserve the original filing date, so a successful appeal can mean coverage from an earlier month than a new application would allow.

Sometimes both. In some cases families file a new application and request a hearing on the original denial at the same time, to protect the earlier date while moving forward. Ask whether this is allowed and sensible in your situation.

Step 4: Act before the deadline

If you decide to appeal, request the hearing in writing before the deadline, keep a copy and get proof that it was received. See Fair hearings and appeals. If you are reapplying, gather what was missing first, so the new application is complete.

Denials of services, not eligibility

Sometimes the person is eligible for Medicaid but a specific service is denied, reduced or ended: fewer home care hours than requested, a denial of a waiver slot, or a managed care plan’s refusal to cover something. These decisions also come with notice and appeal rights. If care is provided through a managed care plan, there is usually an internal plan appeal first, often within 60 days of the notice, before a state fair hearing. If you appeal a reduction or termination of services quickly, often within about 10 days of the notice or before the change takes effect, services may continue while the appeal is decided. See Managed long-term services and supports.

Coverage ending after approval

Coverage can also end at a renewal or after a change is reported. The same rights apply: written notice, a reason, and a right to a hearing. If coverage ended because a renewal form was not returned, many states allow a period (often 90 days) in which returning the form restores coverage without a new application. See Renewals.

A worked example

Margaret’s application is denied for “excess resources.” The notice says her countable assets were $8,400. Her daughter reviews the notice and sees that the state counted a $6,000 prepaid funeral contract as an asset. The contract is irrevocable, which the state’s rules usually exempt, but the copy the family sent did not show that. Her daughter gets a letter from the funeral home confirming the contract is irrevocable and requests a fair hearing. Before the hearing date, the caseworker reviews the letter and reverses the denial, and Margaret is approved from the original filing date. A new application would have cost Margaret one or two months of coverage.

What not to do after a denial

Do not ignore the notice. Deadlines pass quickly.
Do not give money away to “get under the limit.” Gifts can cause a penalty. Spend down only in allowed ways.
Do not assume the state is right. Errors are common, especially in valuing assets and reading trust and funeral documents.
Do not stop paying the nursing home if you can help it. The facility may be able to start discharge proceedings if a denial stands and the bill is unpaid.

Getting experienced help

Deciding whether to reapply, appeal or both, and preparing the evidence for either, is where experienced help often pays for itself. A Certified Medicaid Planner can review the denial, explain whether the state made an error, plan a spend-down or Miller trust if needed, and prepare for a hearing. Free legal aid programs may also help with hearings. As a rough guide, published fees for help with an application range from about $500 to $6,000, and hourly help, often used for appeals, from about $150 to $600.

Frequently asked questions

How long do I have to appeal? It depends on the state, but it can be no more than 90 days from the date the notice was mailed, and is often shorter. Check the notice.

Can I reapply right away? Usually yes. If the reason for denial has been fixed, a new application can be filed at any time.

Will the nursing home discharge my mother after a denial? A facility can begin discharge for nonpayment after a denial, but it must give written notice, usually 30 days, and the resident can appeal. See Nursing home evictions.

Does a denial go on my record? A denial does not prevent future applications. Each application is decided on the facts at the time.

Last updated for 2026. General information only, not legal or financial advice. Medicaid Answers is a free educational resource published by Medicaid Answers Foundation.