Understanding Applied Income : What You Pay Out of Pocket While on Title 19 Medicaid for Long Term Care

Going into a nursing home or skilled nursing facility is a process of overcoming several hurdles and industry jargon. One key term is "Applied Income" (also called “Patient Liability”) — the amount of your income that you’ll be expected to pay toward your care each month if you are on Medicaid in Connecticut. Understanding how this works can help you better plan for the your expenses.

What is Applied Income?

Applied Income refers to the portion of your monthly income that remains after certain allowable deductions. That remaining amount (“net income”) is what the nursing home or long-term care facility expects you to pay. Medicaid then helps cover the rest.

How is Applied Income Calculated?

Start with your total (gross) monthly income. Income can be your social security, pension(s)

annuities, wages (if still working). Medicaid allows only certain deductions before calculating what you must pay. Allowable deductions include personal needs allowance for personal expenses (in CT, it’s usually about $75/month), health insurance premiums, medicare premiums, supplemental insurance, or prescription drug coverage, community spouse or family allowance (if applicable). If you have a spouse still living at home, some of your income may be diverted to support them so they don’t become impoverished.

The balance after you subtract the allowable deductions from your income is your Applied Income / Patient Liability.

Lets use a real time example;

Say your Gross Monthly Income is $2,000, you have a $75 personal needs allowance, you pay $170 for a medicare premium and $800 for your community spouse allowance.

Applied Income =2000−(60+170+800) = 970

Therefore, the nursing home expects $970/month from you, and Medicaid covers the remainder.

How to prepare for your long term care in a facility

• Keep a clear record of your income and expenses.

• Understand what deductions you can claim.

• Talk with an elder law attorney to see if you can minimize your “Patient Liability” legally.

Applied Income plays a big role in how much you’ll continue to pay monthly when receiving nursing home care via Medicaid in Connecticut. With some planning, you can protect more of your resources and reduce financial stress.

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