South Dakota Medicaid Long-Term Care Eligibility

What Medicaid Covers in South Dakota Long-Term Care

South Dakota Medicaid pays for room, board, and nursing services in certified skilled nursing facilities once a resident has been in the facility for at least 30 consecutive days, unless the person was already eligible for Medicaid or dies before the 30th day. It also funds home and community-based care through the HOPE waiver, which covers personal care, homemaker services, and structured family caregiving for people who meet nursing-home-level clinical needs but want to stay home.

What Medicaid does not cover: room and board in assisted living. The HOPE waiver can pay for medical and personal care services inside an assisted living facility, but the resident pays room and board privately.

The Three Eligibility Tests

Every long-term care Medicaid applicant in South Dakota must pass three tests simultaneously — clinical, income, and asset. Failing any one of them blocks approval.

Clinical: A Department of Human Services nurse must confirm that the applicant needs nursing-facility-level care. For HOPE waiver applicants, an LTSS Case Management Specialist conducts an in-home assessment using the Home Care Assessment tool, measuring limitations in activities of daily living like bathing, dressing, transferring, and eating. The completed assessment goes to a DHS nurse for a final level-of-care determination.

Income: South Dakota is a strict income-cap state. The 2026 gross monthly income limit is $2,982 (300% of the Federal Benefit Rate). Every dollar of gross income counts — Social Security, pensions, annuities, VA benefits — before any deductions. If gross income exceeds $2,982 by even one dollar, the applicant is disqualified unless they establish a Qualified Income Trust (Miller Trust) to route the applicant's income through the trust.

Assets: A single applicant can hold no more than $2,000 in countable assets, measured at 12:01 AM on the first day of each calendar month. Married couples get spousal impoverishment protections that shield up to $162,660 for the at-home spouse.

Key Exempt Assets

Not everything counts against the $2,000 limit. South Dakota exempts:

• The primary home, provided equity is below $752,000 and a spouse lives there or the applicant intends to return
• One personal vehicle
• Household goods and personal effects
• Irrevocable prepaid burial plans up to $15,000
• Term life insurance (whole life with cash value over $1,500 is countable)

Retirement accounts — IRAs, 401(k)s — are fully countable in South Dakota regardless of payout status. This catches many families off guard, because some states exclude retirement accounts that are in required minimum distribution mode.

The Miller Trust Workaround

Because South Dakota has no medically needy spend-down program for long-term care, the Miller Trust is the only path for anyone whose gross income exceeds $2,982. The trust must be funded solely with the applicant's personal income. A trustee distributes the funds monthly in a strict order: the $100 personal needs allowance (plus up to the first $75 of gross earned income), then health insurance premiums, then any spousal income diversion, then the remaining patient liability to the care provider. The trust must name the South Dakota Department of Social Services as the primary remainder beneficiary, meaning any funds left when the recipient dies go to reimburse the state.

A Miller Trust requires an elder law attorney to draft — the Department of Social Services does not accept generic online templates.

How to Start the Application

The application goes through the DSS Economic Assistance Division using Form DSS-EA-240, which can be submitted online at eaportal.sd.gov. Standard applications are processed within 45 days; disability-based applications get 90 days. Before applying, contact Dakota at Home (1-833-663-9673) to initiate the clinical intake and level-of-care assessment.

For a step-by-step walkthrough of every eligibility threshold, the Miller Trust setup, asset spend-down strategies, and spousal protections specific to South Dakota, the South Dakota Medicaid Long-Term Care & Asset Protection Guide organizes the entire process into a sequenced checklist with worked financial examples.

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