Decades-old asset caps may keep 1.5 million older adults and people with disabilities from enrolling in Medicaid

Nearly one-quarter of older adults and people living with disabilities who are income-eligible for Medicaid may face barriers to enrollment due to caps on financial assets and home equity limits, according to a new study from researchers at the Johns Hopkins Bloomberg School of Public Health.

The findings, published online June 1 in Health Affairs, suggest that asset limits—many of which have been in place since the late 1980s—on top of income requirements may function more as an impediment than a safeguard against wealthier applicants participating in the program. 

Using nationally representative survey data from 2023, the researchers estimate there were 6.2 million adults age 65 and older and adults living with disabilities age 18 and older who were income eligible but not enrolled in Medicaid that year. Among them, 1.5 million—or 24.7%—exceeded their state’s limit on assets such as checking and saving accounts and investment holdings. The researchers imputed assets using federal survey data. Among the 4.5 million people for whom home equity limits could be evaluated—73% of the 6.2 million not enrolled in Medicaid were homeowners—387,525 exceeded the limit. 

State Medicaid programs set caps on financial assets. Most states have maintained the federal limit of $2,000 for single applicants and $3,000 for married couples. Several states set higher thresholds, such as $17,500 in Illinois and $31,175 in New York.

These asset caps apply to both homeowners and non-homeowners. The federal Medicaid program also sets home equity caps to qualify. Medicaid capped home equity at $713,000, while giving states discretion to raise it as high as $1,071,000. Five states and Washington, D.C., applied the maximum allowable threshold of $1,071,000. Most states used the federal home equity limit of about $713,000.

“In many states, the financial asset limits have not kept pace with inflation or the realities of aging with financial insecurity,” says Andrew Anderson, PhD, assistant professor in the Bloomberg School’s Department of Health Policy and Management and the study’s lead author. “Such low asset limits leave very little cushion for unexpected health and financial crises.”

Key findings include:

• Most income-eligible adults who fell below asset thresholds were enrolled in Medicaid. This suggests that limits may not exclude large numbers of people who are eligible.
• Home equity limits applied only to homeowners were generally higher than median state home values.
• The 387,525 adults above the home equity limit versus those below the threshold were disproportionately homeowners in the Western U.S. (63.4% versus 8.9%) and had estimated home equity of $1,219,275 versus $226,910.
• The 1.5 million adults who were above the financial assets threshold, compared to the 4.7 million adults below it, had:
  • higher levels of education (56.1% versus 16.3% with a bachelor’s degree or higher)
  • higher annual household income (mean of $51,451 versus $43,519)
  • substantially greater mean imputed liquid assets or savings ($36,399 versus $5,202) and average home equity ($374,815 versus $289,230)

The authors note that asset limits may still shape financial behavior by discouraging savings among individuals seeking to maintain Medicaid eligibility. This may be particularly relevant for renters, who often rely more on cash savings for financial stability.

“These asset limit policies aim to ensure Medicaid reaches those with the greatest financial need,” says study co-author Catherine Ettman, PhD, an assistant professor in the Department of Health Policy and Management. “But when savings thresholds remain frozen for decades, they can end up penalizing exactly the kinds of economic resilience and financial security we want people to build.”

The study has several limitations. Medicaid eligibility rules vary across states, assets are measured imprecisely and states permit multiple exceptions, so individuals just above and below limits may face similar eligibility outcomes. It was also unclear to what extent eligible adults did not sign up for Medicaid due to non-financial, administrative reasons, such as not knowing how to enroll or missing recertification.

The researchers say the findings provide an important baseline for understanding how eligibility rules might affect enrollment and whether reforms could reduce administrative burden while improving access for older adults and people with disabilities.

The findings come as federal and state policymakers are examining Medicaid rules. Several states, including California, have recently reformed or expanded asset limits. The authors say policymakers will be watching California’s new cap of $130,000 for individuals and $195,000 for married couples that went into effect January 1 this year to see if it shifts enrollment in the state’s Medicaid program.

The authors were surprised by the number of income-eligible older adults and people living with disabilities who were not enrolled in Medicaid—nearly three-quarters of the 6.2 million identified in the study. One implication for future research is understanding why so many income-eligible individuals remain unenrolled despite appearing to meet financial criteria.

This research was supported in part by a Johns Hopkins Nexus Award. Additional support was provided by the Bloomberg American Health Initiative and the Johns Hopkins Center for Mental Health and Addiction Policy.

“Medicaid Asset Limits and Enrollment Among Older Adults and People with Disabilities” was co-authored by Andrew Anderson, Chau Huynh, and Catherine Ettman.