Out of State Applications
Why Would Someone Apply for Medicaid in Another State?
Medicaid rules for long-term care vary greatly by state, marital status, and program type. While every state sets financial and functional criteria, some are more restrictive while others are more lenient. This means a person could be denied in one state yet qualify in another. Reasons for applying in a different state include:
- Income is too high under current state rules, but another state offers a Qualified Income Trust (Miller Trust) option.
- Countable assets exceed the limit in one state but not in another.
- Functional care need qualifies in one state but not another.
- Previous asset gifts violate one state’s Look-Back Rule, but not another’s.
- Spousal rules in another state allow the non-applicant spouse to retain more income or assets.
- Desire to live closer to adult children in another state.
What Types of Medicaid Programs Make This Strategy Relevant?
This approach is most often used for Home and Community-Based Services (HCBS) Waivers and Nursing Home Medicaid, where costs are high and coverage is critical. It’s generally not useful for Regular Medicaid (Aged, Blind & Disabled), which typically doesn’t cover extensive long-term care. Spousal protection rules also do not apply to Regular Medicaid.
Who Might Benefit from Applying Out of State?
- Residents near a state border
- Those facing long HCBS waiver waiting lists locally, but no wait in another state
- Applicants moving in with adult children in another state
- Households where an IRA is exempt in one state but counted in another
Key Factors to Compare Between States
- Income & Asset Limits: California has no asset limit (as of 1/1/24), while most states cap assets at $2,000; income limits vary widely.
- IRA & 401(k) Treatment: About 11 states exempt applicant IRAs if paying out; others count them toward the limit.
- Excess Income Rules: Some states require a QIT (Income Cap States), others allow spend-down (Medically Needy States).
- Functional Care Standards: Some states require a Nursing Facility Level of Care, others have more lenient risk-based criteria.
- Look-Back Period: Usually 60 months; California and New York have special exceptions.
- Waiver Waiting Lists: Availability varies; some states have immediate access.
Special Rules for Married Applicants
- Community Spouse Resource Allowance (CSRA): Varies by state; ranges from $66,480 to $157,920 in 2025, with 50% vs. 100% asset retention rules.
- Community Spouse’s IRA: Some states exempt fully; others exempt if paying out.
- Monthly Maintenance Needs Allowance (MMNA): Varies from $2,643.75 to $3,948/month; some states allow more transfers of applicant income to the spouse.
Potential Drawbacks and Risks
- You must physically live in the state before applying — using an out-of-state address without moving is fraud.
- Single applicants cannot keep a home in their original state exempt unless a spouse still lives there.
- Every state enforces Medicaid Estate Recovery, meaning protected assets may be claimed after death.
Quick Comparison: Why Rules Differ by State
| Medicaid Factor | Example State with Lenient Rules | Example State with Strict Rules | Impact on Applicant |
|---|---|---|---|
| Asset Limit | California – No limit (2025) | Connecticut – $1,600 | Higher limit may allow more savings to be kept |
| Applicant IRA Treatment | Florida – Exempt if paying out | Illinois – Counts toward asset limit | Exemption can preserve retirement savings |
| Excess Income Handling | Indiana – Allows QIT to qualify | Illinois – Lower limit, no QIT option | QIT states allow eligibility despite higher income |
| Look-Back Period Exceptions | California – No look-back on transfers after 1/1/24 | Texas – 60 months | May avoid penalties for recent asset transfers |
| Community Spouse Resource Allowance | Georgia – $157,920 (100% state) | South Carolina – $66,480 (100% state) | Higher CSRA benefits the non-applicant spouse |
| Monthly Spousal Income Allowance | Most states – $3,948/month | Alabama – $2,643.75/month | Higher allowance improves spousal support |
Should You Get Professional Help?
Yes — a Medicaid Planning Expert can compare state-specific rules, prepare paperwork before you move, and ensure compliance with both states’ laws. Applying before you are physically in the new state is not allowed, so planning ahead is critical.
