Virginia Medicaid Planning GuideSkip to content

Virginia Medicaid Planning Guide

Published: Mar 19, 2020. Last Updated: Dec 25, 2023.


In 1981, the United States Supreme Court called the Medicaid laws “an aggravated assault on the English language, resistant to attempts to understand it.” Schweiker v. Gray Panthers, 453 U.S. 34, 43 (1981). In 1994, the United States Court of Appeals for the Fourth Circuit (just below the U.S. Supreme Court), called Virginia's Medicaid plan one of the "most completely impenetrable texts within human experience" and "dense reading of the most tortuous kind." Rehabilitation Ass'n of Va. v. Kozlowski, 42 F.3d 1444, 1450 (4th Cir. 1994). Since then, it has only gotten worse. 

Due to the tremendous complexity of the Medicaid laws, the Medicaid application process is also extremely complicated, and many persons who file for Medicaid without professional assistance will wind up with the application being rejected for a variety of reasons. Rejection often occurs due to financial issues - either excess resources, excess income, or improperly-timed gifts or transfers. Rejection in many cases is due to missing or incomplete information or verifications. Applications are also sometimes improperly rejected by an eligibility worker (most of whom are underpaid and overworked) who has not had the time to carefully and thoroughly review the application and verifications, or who has improperly applied the legal or financial requirements for eligibility.

Worse yet, an application that is filed at the wrong time can result not only in rejection, but in the imposition of significant penalties against the applicant that could have been avoided by a more timely filing. For these and many other reasons, an experienced Virginia elder law attorney should always be hired to represent the applicant through the entire Medicaid process - including planning for eligibility, preparing and filing the application, working with the local Department of Social Services or Family Services during the application and verification process, filing an appeal when necessary, and representing the applicant in connection with any required hearings and appeals.

Virginia is a "209B" state, meaning that Virginia uses its own eligibility criteria in determining Medicaid eligibility for the elderly and disabled, rather than extending Medicaid coverage to all who qualify for Federal Supplemental Security Income (SSI) benefits.

Numbers at a Glance

Divestment Penalty Divisors (updated July 1, 2020)

Northern Virginia Penalty Divisor: $9,032.00 – Northern Virginia (Alexandria, Arlington, Fairfax, Falls Church, Loudoun, Manassas, Prince William)

Rest of Virginia Penalty Divisor: $6,422

Individual Resource Allowance

VA: $2,000

Married Couple Resource Allowance

VA: $3,000

Monthly Personal Income Allowance for Nursing Home Residents

VA: $40

Shelter Standard

VA: $646.50

Standard Utility Allowance

VA: $311

Medicaid Home Equity Cap


Community Spouse Resource Allowance

Minimum Community Spouse Resource Allowance: $25,728

Maximum Community Spouse Resource Allowance: $128,640

Community Spouse Monthly Maintenance Needs Allowance

Minimum Monthly Maintenance Needs Allowance: $2,155

Maximum Monthly Maintenance Needs Allowance (except in Alaska and Hawaii): $3,216


In Virginia, an unmarried applicant for Medicaid long-term care assistance may have no more than the Resource Allowance set forth above in "countable resources" in his or her name in order to be "resource eligible" for Medicaid.


Virginia is a "medically needy" state, rather than an "income cap" state, meaning that for Medicaid long-term care assistance, if an applicant is medically in need of nursing home care, the applicant will qualify for Medicaid benefits (providing the applicant is otherwise eligible) so long as the applicant's gross income is below the private cost of care. In other words, no Miller Trust (aka Qualifying Income Trust) is needed in Virginia. The nursing home resident must pay all of his or her income, less certain deductions, to the nursing home. The deductions include the personal needs allowance set forth above, a deduction for any uncovered medical costs (including medical insurance premiums), and, in the case of a married applicant, an allowance he or she may possibly be able to pay to the spouse that continues to live at home.

Community-Based Care Waiver Services

Virginia has unlimited Community-Based Care (CBC) Waiver services for the elderly (called the CCC Plus Waiver), which can be authorized as an alternative to nursing facility care when the individual meets the clinical criteria for needing nursing home level-of-care. It covers up to 8 hours per day of in-home care, plus an additional 480 hours per year of respite care. Most of the financial eligibility requirements for CBC applicants are the same as the requirements for nursing home applicants. This is includes resource eligibility, and transfer eligibility. However, the income eligibility rules are more complex for the CCC Plus Waiver than for nursing home Medicaid. If income is higher than a certain amount (300% of SSI), then an applicant can still qualify but will need to be on a monthly income spenddown plan which requires the applicant to incur home care bills each month in excess of their income spenddown amount, and then report that information to Medicaid in order for Medicaid to approve each month retroactively.

Treatment of the Primary Residence

For Medicaid payment of nursing home long-term care, the applicant's principal residence is excluded from countable resources only for the first six months of continuous institutionalization, provided the applicant intends to return home and provided the equity in the home property does not exceed the home equity limit stated above. Regardless of the amount of home equity, after six months of continuous institutionalization, the nursing home resident's home will become a countable resource, unless the home is occupied by a spouse, dependent child under age 21, or a blind or disabled child. However, as a practical matter, there are numerous ways in Virginia to protect the home, as well as other real estate, by using an experienced Elder Law Attorney.

Protections for the Community Spouse

Community Spouse Resource Allowance

All countable assets owned by the married couple as of the first day of the month that the applicant becomes institutionalized, regardless of how the assets are titled, are divided, for purpose of calculation, into equal halves. One-half of the countable assets, up to the maximum Community Spouse Resource Allowance (CSRA) and subject to the minimum CSRA, is allocated to the community spouse. The other half of the countable assets is allocated to the nursing home spouse, and must be spent (or protected) until only the Individual Resource Allowance remains, at which time the nursing home spouse will then qualify for Medicaid.

In reality, using an experienced Elder Law attorney, all assets of a married couple can be protected using a combination of numerous asset protection strategies.

Community Spouse Monthly Income Allowance

The Community Spouse Monthly Income Allowance is an amount by which the minimum monthly maintenance needs allowance (MMMNA) exceeds the amount of monthly income otherwise available to the community spouse.

The Community Spouse Monthly Income Allowance is calculated as follows:

  • MMMNA plus
  • The Excess Shelter Allowance, which equals the amount by which the at-home spouse's shelter expenses (rent or mortgage, homeowner's insurance, real estate taxes, condominium/HOA/Coop Fees, and the Utility Standard stated above) exceed the Shelter Standard set forth above. If the at-home spouse's income falls below his or her Minimum MMNA, the shortfall can be made up from the nursing home spouse's income up to amount of Maximum MMNA.

In reality, using an experienced Elder Law attorney, a much larger amount of income of the Medicaid spouse can be shifted to the Community Spouse in many cases.

Spousal Refusal

Only under extremely strict and limited circumstances does Virginia Medicaid allow spousal refusal, where it disregards all assets of the Community Spouse so long as the Community Spouse assigns all support rights to the Commonwealth.

Treatment of Annuities

Before February 8, 2006: An annuity issued prior to February 8, 2006, is considered a countable resource if the annuity can be surrendered. The countable value of the annuity is the amount of the funds in the annuity minus any fees required for surrender. 

After February 8, 2006: A non-employment related annuity purchased by or for an individual on or after February 8, 2006, using that individual’s assets will be considered an available resource unless the annuity is irrevocable, non-assignable, actuarially sound, and provides for payments in equal amounts during the term of the annuity with no deferral and no balloon payments made. All annuities purchased by the institutionalized individual or a community spouse on or after February 8, 2006, must name the Commonwealth of Virginia as the primary beneficiary for at least the total amount of medical assistance paid on behalf of the institutionalized individual. If there is a community spouse or minor or disabled child, the Commonwealth must be named as the remainder beneficiary behind the spouse or minor or disabled child.

Transfer Rules

Before February 8, 2006: If the expected return on the annuity is commensurate with a reasonable estimate of the beneficiary’s life expectancy, the annuity is actuarially sound and its purchase is a transfer of assets for fair market value.

After February 8, 2006: An annuity purchased by an institutionalized individual or the community spouse on or after February 8, 2006, will be treated as an uncompensated transfer unless the state is named as the remainder beneficiary in the first position for at least the total amount of medical assistance paid on behalf of the annuitant. An annuity purchased by the institutionalized individual on or after February 8, 2006, will be considered an uncompensated transfer unless the annuity is described in one of the relevant subsections of section 408 of the Internal Revenue Service (IRS) Code. An annuity purchased by the institutionalized individual on or after February 8, 2006, will be considered an uncompensated transfer unless the annuity is irrevocable and non-assignable; actuarially sound; and provides for equal payments with no deferral and no balloon payments.

Estate Recovery Rules

DMAS (the Virginia Department of Medical Assistance Services) is required to make a claim against a deceased enrollee’s estate provided the individual was age 55 or over when the individual received medical assistance. DMAS is required to take all reasonable measures to determine the existence of deceased eligible individuals with recoverable estates, but personal representatives in Virginia have no affirmative duty to notify potential estate creditors. Recovery is not initiated unless both the amount of the claim and the value of the estate at least exceed the administrative cost of recovery.

DMAS does not pursue estate recovery if there is a:

  • surviving spouse; or
  • surviving child who is under 21 or disable; or
  • surviving sibling who had an equity interest in the deceased's home and resided in the property for at least one year prior to the deceased's entering a nursing facility.

In reality, working with an experienced Elder Law Attorney, there are several ways to avoid Virginia Medicaid Estate Recovery.

Relevant Federal and State Statutes, Regulations, and Rules

  1. Social Security Act Title XIX, 42 USC § 1396 et seq.

  2. 42 USC § 1396p (transfer of assets / estate recovery / trusts).

  3. 42 USC § 1396r-5 (special rules applicable to an institutionalized spouse who has a "community spouse").

  4. Deficit Reduction Act of 2005, Pub. L. No. 109-171 ("DRA"), signed into law on February 8, 2006. The provisions of DRA dealing with the changes to eligibility for Medicaid long-term care are contained at §§ 6011 - 6021, and 6036 of the DRA.

  5. 42 CFR 430 et seq.

  6. Virginia’s Medicaid Rules are set forth in the Virginia Administrative Code at 12VAC30-20 et seq. and the Virginia Medicaid Manual, accessible online at  

About the Author

Evan Farr


Farr Law Firm, P.C. (703) 691-1888

Evan Farr has decades of experience as an elder law attorney and is licensed to practice law in Virginia, Maryland and the District of Columbia. His specialties include Medicaid planning, Veterans Aid and Attendance Benefits planning and estate planning. He graduated from the University of Pennsylvania in 1984 and the College of William & Mary Law School in 1987. He is a Charter Member of the Academy of Special Needs Planners and one of just 100 members of the National Academy of Elder Law Attorneys Council of Advanced Practitioners. He is also the past President of the Virginia Academy of Elder Law Attorneys and past Chair of the Virginia Bar Association Elder Law Section. He is also a member of the Virginia and District of Columbia Bar Associations. Finally, Elder Guide recommends each of his four best selling books on elder law: How to Protect Your Assets From Probate PLUS Lawsuits PLUS Nursing Home Expenses with the Living Trust Plus®; the Nursing Home Survival Guide; Protect & Defend; and Protecting Your Assets from Probate and Long-Term Care: Don’t Let the System Bankrupt You and Your Loved Ones.