For Medicaid, income is the money that comes in each month. This is money from pensions, Social Security, annuity payments, etc. Although they are dollars and cents, Medicaid looks at income differently than resources. Income becomes a resource only after it's been held for one month.

What does Medicaid require me to do with my income?

The answer depends on whether you're married or single.

Single individuals are allowed to keep $50 as a Personal Needs Allowance and the rest must be spent on care (and then Medicaid pays the balance of the bill). The amount that has to be spent on care is called "Patient Liability."

Married couples have a different analysis. Medicaid policy allows the spouse who stays home (the Community Spouse) to sometimes receive some of the other spouse's income. This applies where the Community Spouse has low income and high expenses—think stay-at-home wife who has $700 of income and lives in a condominium with a mortgage. In this case, Medicaid allows some of the husband's income to be given to the Community Spouse to help her make ends meet. So for a married Medicaid participant, the participant gets to keep $50, the spouse is given the "Monthly Income Allowance" when appropriate, and the rest is Patient Liability.

Can my income be too high to participate?

Yes. If your monthly income is higher than the amount Medicaid pays the facility, you might earn too much to qualify for benefits. Also, if your income is above $2,250 per month, you will be required to have a Qualified Income Trust to qualify for benefits.