As Ohio prepares for key changes to Medicaid eligibility thresholds in the second half of 2025, seniors and their families are facing a shifting landscape that demands proactive planning. These changes are more than just numbers; they affect real lives, legal rights, and long-term financial security. Understanding what’s coming and how to respond could mean the difference between preserving assets and losing them to long-term care costs or state recovery programs.
Why These Changes Matter
Ohio’s Medicaid program serves as a critical safety net for seniors who require long-term care but cannot afford to pay privately. In 2025, updates to eligibility thresholds will increase the amount of income that a healthy spouse can keep while their partner receives Medicaid benefits.
Key updates include:
- Minimum Monthly Maintenance Needs Allowance (MMMNA) increases from $2,555 to $2,643.75, ensuring that the spouse not receiving Medicaid (known as the “community spouse”) retains enough income to cover basic living expenses.
- Excess Shelter Allowance (ESA) increases from $766.50 to $793.13, allowing the community spouse to retain additional income when responsible for utilities such as gas, electricity, trash, or sewer.
These adjustments are modest but meaningful, offering slightly more breathing room for household budgeting. Still, one number that remains unchanged is especially striking: the asset limit for an unmarried Medicaid applicant remains $2,000, a figure that has not increased in over a decade.
The Risks of Waiting: Planning Pitfalls
When it comes to Medicaid eligibility, time is not on your side. A critical concept to understand is the “five-year lookback period.” This rule allows Medicaid to examine an applicant’s financial history for the five years leading up to their application to determine if any assets were transferred or gifted. If so, the applicant may face a penalty period, during which they will not qualify for coverage.
For example, if a Medicaid applicant gifted $77,870 within the lookback window, they would face a 10-month penalty period (calculated by dividing the gift amount by $7,787, Ohio’s current penalty divisor). During this time, Medicaid would not cover long-term care, even if the applicant otherwise qualified.
Early planning enables families to explore legitimate strategies for protecting assets, such as utilizing irrevocable trusts or acquiring certain exempt resources. Those who wait until a health crisis hits may find it’s too late.
What Is Medicaid Estate Recovery—and Why Should You Care?
Medicaid Estate Recovery is the process through which the state attempts to recoup funds it spent on a recipient’s care by claiming from their estate after death. This often surprises families who believed certain assets were “protected” simply because a beneficiary was named.
Key points about estate recovery include:
- Recovery applies to anyone age 55 or older who received Medicaid benefits.
- It includes all assets owned at death, such as real estate, vehicles, bank accounts, and investments.
- It may also apply to improperly transferred assets that were not disclosed.
- Having a Transfer on Death (TOD) designation or named beneficiary does not necessarily shield an asset from recovery.
The recovery amount is limited to what Medicaid paid on the recipient’s behalf. If the state paid $100,000 for care, it cannot recover more than that, even if the estate is worth significantly more.
A Real-Life Example:
A client’s elderly relative received Medicaid to cover nursing home care after spending down his assets. When he passed away, the family hoped to sell his remaining property and reimburse a relative who had paid for his personal items during his illness. However, the proceeds from the sale—along with the contents of his bank account—were claimed by Medicaid, leaving the family with nothing.
This story highlights a poignant truth: without strategic planning, estate recovery can erode the very assets a family had hoped to preserve.
What’s Next for Medicaid Expansion?
Beyond long-term care, the broader question of Medicaid expansion looms. Governor Mike DeWine is currently reviewing a budget proposal that could eliminate the expansion under MAGI (Modified Adjusted Gross Income) eligibility. This provision, which provides health coverage to low-income adults who do not yet qualify for Medicare, is under threat.
If removed, thousands of Ohioans—many of whom are working but earning below a livable wage—could lose access to healthcare. While the budget maintains an option to cut the program rather than an outright removal, it remains a critical issue to watch.
Plan Early, Protect More
The rules governing Medicaid eligibility and estate recovery are complex and unforgiving. With rising healthcare costs and a system that penalizes late planning, families cannot afford to be reactive.
Early legal guidance can help preserve assets, ensure compliance, and protect the dignity and wishes of aging loved ones. As changes continue to unfold this year and beyond, now is the time to consult with an experienced elder law attorney who understands the full implications of Medicaid planning.
If you or a loved one may need long-term care in the future, don’t wait until it’s too late. Strategic planning today can ensure peace of mind tomorrow.
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