Elder Law Firm of Steve Bailey

Does Your Aging Loved One Qualify for Medicaid?

  “Medicaid is the safety net that can provide needed medical care for seniors, who cannot afford health insurance and do not qualify for Medicare.”

If you have an older relative or friend without health insurance, you might wonder if Medicaid could meet her need for coverage. Going without health insurance is risky, especially in advanced age. One trip to the emergency room can cost thousands of dollars, and prescription drugs can cost hundreds of dollars a month. If she is not eligible for Medicare, does your aging loved one qualify for Medicaid?

Many people mistakenly believe that everyone gets Medicare, when they turn 65. This assumption is incorrect. You must have worked for enough years at jobs that earned enough money and paid into the Social Security system to get Medicare, when you hit 65. Medicare is an insurance system that receives part of its funding from the payroll deductions employers withhold from workers’ wages and that employers also pay in matching contributions.

Medicaid is a Safety Net

If a senior did not work enough years at jobs that paid Social Security taxes or worked only part-time, he might not qualify for Medicare. Let’s say he is self-employed as a house painter, but he barely made enough money to survive. His Social Security and Medicare payments through the years were not enough to make him eligible for Medicare, so he has “slipped through the cracks.” Far more Americans are in this situation than people might realize.

As a matter of public policy, we do not want people to be destitute at any age. Medicaid is the safety net that can provide needed medical care for seniors, who cannot afford health insurance and do not qualify for Medicare. Sometimes, Medicaid will pay for a senior’s Medicare premiums, deductibles, and coinsurance.

How to Qualify for Medicaid

Federal law requires states to provide Medicaid health insurance for people in certain categories, including low income. States use a person’s Modified Adjusted Gross Income (MAGI) to determine Medicaid eligibility. The maximum qualifying MAGI can change every year. People who are blind, disabled, or age 65 and older use the income guidelines of the Supplemental Security Income (SSI) program to qualify for Medicaid, instead of MAGI.

The SSI guidelines include both income and asset limits. If you earn $1,820 a month or more in 2018, you will not be eligible for Medicaid, but not everything counts as income.

An individual can own no more than $2,000 in assets ($3,000 for a couple), but Medicaid exempts assets from this total. Exempt assets include such things as your home and land if you live in the house, your household goods and personal items and the vehicle that transports you.

Your state’s Medicaid program might have different requirements, but they cannot provide less than the federal law requires. Your state might provide better Medicaid benefits or use more lenient qualifying criteria than the federal law. The MAGI income eligibility for Medicaid comes from the Affordable Care Act (ACA), which could change at any time due to changes in politics.

Medicaid regulations and benefits are different in every state, and can vary from the general law of this article. Talk with a local elder law attorney, to discover how Medicaid works in your state.

References:

Centers for Medicare & Medicaid. “Eligibility.” (accessed September 6, 2018) https://www.medicaid.gov/medicaid/eligibility/index.html

Social Security Administration. “Understanding Supplemental Security Income SSI Eligibility Requirements – 2018 Edition.” (accessed September 6, 2018) https://www.ssa.gov/ssi/text-eligibility-ussi.htm

How Many Days Will Medicare Pay for a Nursing Home Stay?

“Original Medicare will pay a portion of your costs to receive skilled nursing care at a qualifying facility for a limited number of days.”

Medicare has limited coverage for nursing home care, and even if you qualify, they will only help pay for a short stay. If you find yourself in need of nursing home care, it will help to know how many days will Medicare pay for a nursing home stay?

How Many Days of Medicare Nursing Home Coverage Do You Have?

Original Medicare will pay a portion of your costs to receive skilled nursing care at a qualifying facility for a few days. The amount Medicare covers will vary by the number of days you need the services, within a benefit period. Medicare pays:

• All of your costs of skilled nursing care for the first 20 days of each benefit period.
• All but $167.50 per day for Days 21 – 100 per benefit period. You must pay the coinsurance amount of $167.50 a day for these days.
• After Day 100 of care within each benefit period, Medicare pays nothing for your skilled nursing care. You must bear these costs yourself.

What Are the Requirements for Medicare Coverage of Nursing Home Care?

Medicare makes you jump through multiple hoops to get any benefits for staying in a qualifying nursing facility. These requirements include:

• You have Part A coverage.
• You have not used all of your allotted days in your benefit period.
• You had a qualifying hospital stay (three or more days inpatient at a hospital).
• Your doctor certifies that you need daily skilled nursing care.
• You use a Medicare-approved skilled nursing facility.
• Your medical condition is hospital-related.

Medicare and Standard Nursing Home Care

If you need only custodial care, Medicare will not help pay anything for your stay in a nursing home. Custodial care is when people need help with activities of daily living, such as bathing, dressing, and eating. Medicare will only pay, if you need skilled nursing care, like changing sterile dressings. If Medicare determines that it is not medically necessary for you to have help with your care, they will not pay for it.

What is a Certified Skilled Nursing Facility?

Even if you satisfy the requirement that your skilled nursing care is medically necessary, Medicare will only pay for your brief stay at a skilled nursing facility (SNF) that meets Medicare’s certification process. If the place where you receive your care is not a certified SNF, Medicare will not pay.

What Does Medicare Cover at an SNF?

For the short time Medicare allows you to stay at an SNF, they will help pay for these services:

• A semi-private room (shared with at least one other patient)
• Food
• Skilled nursing care
• Services to meet the approved health goal of your stay at the SNF, which might include physical therapy, occupational therapy, and speech-language pathology services.
• Drugs
• The supplies and equipment used for your care while you were an inpatient in the SNF.

What is a Benefit Period?

Medicare starts the clock over on your SNF coverage for each benefit period, and you have an unlimited number of benefit periods. The day you become an inpatient at a hospital or SNF, a new benefit period begins. It ends when you go for 60 days in a row, receiving no inpatient hospital care or SNF care.

This article discusses the general law, and your state might have different regulations. Talk with an elder law attorney in your area.

References:

Centers for Medicare & Medicaid Services. “Medicare Part A coverage – nursing home care.” (accessed June 14, 2018) https://www.medicare.gov/what-medicare-covers/part-a/part-a-coverage-nursing-home-care.html

Can Your Older Parent’s New Spouse Swipe Your Inheritance?

“Older couples have found out the hard way that getting married later in life, can throw a wrench into more than just inheritance.”

If your parent gets “serious” about someone he is dating, you might have mixed feelings. While you do not want your parent to be lonely, new romantic relationships for older adults come with complications that younger couples do not face. When your parent, who has been single, divorced, or widowed, contemplates marriage, you might wonder, can your older parent’s new spouse swipe your inheritance?

The short answer is yes without proper legal planning. The new blushing bride or groom can claim part of the estate, if your parent dies first. The precise percentage of the estate going to the surviving spouse can vary between one-third and over one-half depending upon circumstances.

How Can an Older Adult Protect Her Child’s Inheritance If She Remarries?

There is no way to guarantee your children’s inheritance when you remarry, unless they are under the age of eighteen. Minor children usually have a claim to a portion of a deceased parent’s estate. Once your kids turn 18, however, they do not have an automatic right to inherit from you.

You can sign a prenuptial agreement before getting married and write new wills after you get married, but people have successfully busted prenups and contested wills. They are not written in stone. Once you are gone, your surviving spouse could go back on her word and challenge these documents. If a judge sets aside the will and prenup, the widow could demand her legal share of your estate.

Alabama is unique among states because it’s law allows a spouse to be completely disinherited if your parent’s assets are owned by a living trust that avoids probate. A trust can also be contested just like a Will but it is more difficult than a will and as long as the trust was created when your parent had mental capacity and was under no undue influence it will be upheld.

What Other Fall-Out Can Happen When Seniors Marry?

Older couples have discovered the hard way, that getting married later in life can throw a wrench into more than just inheritance. Remarriage can cause a senior to lose Medicaid and Supplemental Security Income (SSI). Tying the knot can make you ineligible for your former spouse’s pension, Social Security retirement or disability income, and alimony.

More couples over the age of 55 are skipping the altar than ever before. In just the last decade, the numbers have jumped 75 percent. Many are living together as unmarried couples. Some have a ceremony that does not create legal rights.

The financial consequences of remarriage later in life can be severe to the new spouses, their children, and grandchildren. To protect yourself and your family, talk with an elder law attorney in your area. State law will control most issues, and the laws vary from one state to the next. This article discusses the general law.

References:

The New York Times: “When Your Parents Remarry, Everyone Is Happy, Right?” (accessed March 24, 2018) https://www.nytimes.com/2018/03/22/your-money/parents-remarry-inheritance-children.html

How to Pay for the Costs of Care for Alzheimer’s or Other Dementia

“To a certain extent, your financial options for paying for the expenses of dementia will depend on the age of your loved one and whether he is still working.”

After the reality sinks in that your loved one does, in fact, have Alzheimer’s or some other form of dementia, you discover that you now have more to think about than the diagnosis. It may have taken several years to get the diagnosis, while you worried about the well-being of your aging relative. Now that you know what your family is facing, the practical concerns kick in, and you need to develop a strategy for dealing with this situation. One of your primary questions is how to pay for the costs of care for Alzheimer’s or other dementia.

Having a loved one with a significant special need, like Alzheimer’s or another form of dementia, can be life-changing. You need to make sure someone is watching out for her twenty-four hours a day, seven days a week. If you have a huge family nearby, you might be able to take shifts for a while.  However, in time you will likely need to hire outside help or assist your loved one to move into residential care. Your loved one with dementia will face many other expenses. Here are some of the typical expenses for a person with dementia:

• In-home care, which can involve meal preparation, grooming, household chores, medical treatments, medication management and wellness/safety supervision.
• Home modifications for the safety and comfort of the senior with dementia.
• Drugs for the management of dementia and any other medical issues.
• Tracking devices and monthly monitoring fees can be a true lifesaver for finding a dementia patient who has wandered away from home or residential care.
• Inpatient treatment for short-term medical needs.
• Long-term care, ideally in a residential memory-care facility.

How to Pay for These Costs

To a certain extent, your financial options for paying for the expenses of dementia will depend on the age of your loved one and whether he is still working. Some people in the early stages of dementia manage to maintain employment. Here are six sources of funding for the expenses that can accompany dementia:

1. Insurance. If your loved one is age 65 or older, Medicare may pick up some of her medical expenses for dementia care. If she is still working and under 65, her group employee health plan is an option. If she is under 65 but does not have group employee health insurance, check to see if she has a private health insurance plan.
2. Employee benefits. People who are still working might have a menu of employee benefits that can help cover some expenses of dementia. Check with the human resources or employee benefits department about your loved one’s eligibility for paid sick leave or short-term disability benefits. A flexible spending account can also pay for some costs.
3. Retirement benefits. If your loved one is retired, check to see what retirement benefits she can use. There may be more than one of these retirement accounts: IRAs, annuities, 401(k)s, 403(b)s, and pensions.
4. Personal assets. Some items might not have outside sources of funding. For these things, your loved one might have to spend personal assets.
5. Government assistance. In addition to Medicare, many other public programs can assist with income, long-term care expenses, and other costs. If your loved one is under 65, Social Security Disability Insurance (SSDI) might send him a monthly check. Check to see if he qualifies for Supplemental Security Income (SSI), Medicaid, or veterans’ benefits. Sometimes a family member can get paid for serving as a caregiver for your loved one.
6. Community support services. Local community organizations can offer free or low-cost home-delivered meals, transportation, support groups, respite care, and other services for your loved one and her family. Check with your local Alzheimer’s Association chapter or use the association’s Community Resource Finder to locate services in your area.

Every state has different laws and programs, so be sure to talk with an elder law attorney near you.

References:

Alzheimer’s Association. “Community Resource Finder.” (accessed February 16, 2018) https://www.communityresourcefinder.org/

Alzheimer’s Association. “Paying for Care.” (accessed February 16, 2018) https://www.alz.org/care/alzheimers-dementia-costs-paying-for-care.asp#insurance

Income Too High for Medicaid? You Might Consider a Miller Trust

“Since Alabama does not permit qualifying for Medicaid nursing home benefits by spending down your income on medical expenses, you can set up an irrevocable Miller trust.”

If you are caught in that “no man’s land” of having too much income to qualify for Medicaid to pay your nursing home expenses, but not having enough money to pay for a nursing home out of your own funds, do not despair. You have options. Some states allow you to spend part of your income on your medical expenses to bring down the amount they will count as your income. People call these states “spend-down” or “medically needy” states. But what do you do since Alabama does not allow “spend-down?” Is your income too high for Medicaid?  If so, you might consider a Miller trust. 

Miller Trusts briefly

Miller trusts, also called Qualified Income Trusts (QITs), came about because of a 1990 Colorado court case. If your state does not permit qualifying for Medicaid nursing home benefits by spending down your income on medical expenses, you can set up an irrevocable Miller trust.

Your “extra income” is your income that exceeds the Medicaid limit. Your extra income goes into the trust, which will pay you a personal needs allowance every month and give your spouse who still lives at home (called the community spouse because he or she still lives in the community as opposed to in the nursing home) a minimum monthly maintenance needs allowance (MMMNA), if applicable. Any income left over will go to the nursing home. Medicaid will pay your remaining monthly nursing home bill.

You must designate someone to serve as the trustee of the Miller trust. Every month, this person will pay out the personal needs allowance, spousal MMMNA and your portion of your nursing home bill. You may not serve as the trustee of your account, but a family member can do so.

A Rose by Any Other Name

Not all states call them Miller trusts. Here are some of the other names for Miller trusts across the country:

• Income Diversion Trusts
• Medicaid Income-Only Trusts
• Income Cap Trusts
• (d)(4)(B) Trusts
• Income Only Trusts
• Income Assignment Trusts

Downsides to Miller Trusts

They are irrevocable. Unless you have extraordinary circumstances, you cannot undo a Miller trust. If your income is higher than the Medicaid-approved monthly cost of your nursing home, you cannot use a Miller trust to qualify for Medicaid.

Reasons to Consider a Miller Trust

In Alabama the legal fees to set up a Miller trust are usually reasonable. The money you will save on paying for a nursing home will greatly outweigh the costs to set up the trust.

Nursing homes are expensive, costing thousands of dollars a month. The fees could quickly impoverish you and your spouse, if you do not avail yourself of Medicaid nursing home benefits and shelter income for your spouse.

If Medicaid does not approve of your Miller trust, they can deny you nursing home expense benefits. The laws vary from state to state. This posting discusses the general law. Talk with an elder lawyer in your area.

References:

Paying for Senior Care. “Qualifying for Medicaid using Trusts: QITs, Miller, Pooled Income Cap and Other Trusts.” (accessed January 31, 2018) https://www.payingforseniorcare.com/medicaid-pooled-income-special-needs-trusts.html

Aging Care. “How to Use a Miller Trust for Medicaid Eligibility.” (accessed January 31, 2018) https://www.agingcare.com/articles/how-to-use-a-miller-trust-for-medicaid-eligibility-207367.htm

When Should I Apply for Medicaid for Long-term Care?

 “If you are planning to move into long-term care, it would help if you understood how to line up your income and assets to meet the eligibility requirements. Getting your timing right can increase your odds of getting Medicaid to pay for your nursing home or assisted living costs.”

With the cost of nursing home care averaging $235 a day ($85,775 a year) in the United States, and some places as high as $800 a day ($292,000 a year), your life savings could quickly disappear. If you are planning to move into long-term care, it will help if you understood how to line up your income and assets to meet the eligibility requirements. Getting your timing right can increase your chances of getting Medicaid to pay your nursing home or assisted living costs. This article answers your question, when should I apply for Medicaid for long-term care?

When to Apply for Medicaid for Nursing Home Care

The short answer is that you should apply when you meet the qualifications. If you do not meet the requirements, it is pointless to apply.  However, there are exceptions to the eligibility rules, and the exceptions are different in every state. Talk with a local elder law attorney  to learn your state’s requirements. If you fall within a rules exception in your state, it may be a good time to start the application process.

Eligibility Requirements for Medicaid to Help Pay Your Long-Term Care Costs

Functional eligibility test. Medicaid will not pay for you to live in a nursing home, if you can physically and mentally take care of yourself at home. If you move into a nursing home because you do not want to live alone or for some other reason other than needing help with the functions of daily living, Medicaid will not help with your costs. Each state defines the functions of daily living differently, and has different standards for how much help you must need with functional tasks to qualify. Daily living functions include:

• Dressing
• Bathing
• Preparing meals
• Eating
• Using the bathroom
• Getting in and out of a chair or your bed

Income and assets guidelines. You must not exceed the Medicaid income and assets limits for your state for Medicaid to pay your long-term care costs. These numbers differ from state to state, but you must have low income and few assets. In some states, the Medicaid income and assets limits are higher for nursing home benefits recipients than for getting Medicaid for non-nursing home services.

“Medically needy” or “spend down” programs. These programs allow people whose income is too high for Medicaid to qualify, if significant medical ongoing bills reduce how much of their income is available for other living expenses.

Spouse at home rules. It is possible to protect some of your income and assets for your spouse who lives at home in the community, and not in the nursing home. The rules for doing this sheltering vary by state.

Five-year “look back” period. Medicaid will examine your finances for the last five years to see if you gave away your assets to friends and family, rather than have to use them to pay your nursing home bills. If you did, Medicaid can impose substantial penalties on you.  Therefore, the best time to apply for Medicaid is also when you have made no significant gifts during the last five years. Like many other guidelines, there are exceptions to this rule.

Medicaid nursing home benefits and requirements are different in every state, so talk with an elder law attorney in your area. This article discusses the general law.

References:

Paying for Senior Care. “How to Pay for Nursing Home Care/Convalescent Care.” (accessed December 27, 2017) https://www.payingforseniorcare.com/longtermcare/paying-for-nursing-homes.html

Medicare Interactive. “How can I get Medicaid if I need nursing home care and have Medicare?” (accessed December 27, 2017) https://www.medicareinteractive.org/get-answers/programs-for-people-with-limited-income/medicaid-and-medicare/how-can-i-get-medicaid-if-i-need-nursing-home-care-and-have-medicare

Centers for Medicare & Medicaid Services. “Nursing Home Toolkit: Nursing Homes – A Guide for Medicaid Beneficiaries’ Families and Helpers.” (accessed December 27, 2017) https://www.cms.gov/Medicare-Medicaid-Coordination/Fraud-Prevention/Medicaid-Integrity-Education/Downloads/nursinghome-beneficiary-booklet.pdf

Nolo. “When Will Medicaid Pay for a Nursing Home or Assisted Living?” (accessed December 27, 2017) https://www.nolo.com/legal-encyclopedia/when-will-medicaid-pay-nursing-home-assisted-living.html

To Gift or Not to Gift - Understanding the Medicaid Gifting Penalty

“Of course, you would not think of a gift to your child as fraud, but Medicaid may see it differently. They may construe it as an attempt to offload your assets to fall below the asset limit required to qualify for Medicaid benefits.”

If you are in your fifties or older, you may have heard about the Medicaid penalty period, However,  you might not know what it is. You know that if you give people gifts during the wrong block of time, you can end up ineligible for Medicaid help with nursing home costs. Not being clear on what you can and cannot do, keeps you in a stressed-out state of limbo. You want to make gifts to your adult children to reduce the taxes on your estate one day, but you do not want to get hit with negative financial repercussions. You need information on whether you should choose to gift or not to gift – understanding the Medicaid gifting penalty.

How the Medicaid Gifting Penalty Works

You can make generous gifts to your children, and you are in good health, so you think that if you ever need nursing home care, it will be many years later. You have four married children. You give each child and his or her spouse $10,000 for a total of $80,000. Four years and 11 months go by with no problem, and then a health crisis causes you to need to move into a nursing home right away.

You apply for Medicaid benefits to help pay your nursing home costs. One of the first things Medicaid does is put all of your financial accounts and transactions for the last five years under a microscope. This analysis is called the “look back” period. They are looking for fraudulent or improper transfers of assets. You would not think of a gift to your child as fraud, but Medicaid may see it differently. They may construe it as an attempt to offload your assets to fall below the asset limit required to qualify for Medicaid benefits.  Many people do not want to spend what they view as their children’s inheritance on nursing home bills, so they give their assets to their children, not realizing that Medicaid will penalize them for these transfers.

How to Calculate the Penalty

Medicaid will examine any significant gift or asset transfer you make within the 60 months, before you apply for Medicaid benefits to see if it is improper. If Medicaid determines that the $80,000 in gifts violated the rules against fraudulent transfers, they will impose a harsh financial penalty – measured in time, not dollars. They will refuse to pay your Medicaid bills for a time equal to what that $80,000 would have bought you at the average nursing home in Alabama.

For example, if Medicaid says the average nursing home in Alabama costs $5,800 a month, they will make you somehow pay for the first 13.79 months you are in a nursing home. They do not care you are just one month away from the $80,000 gift falling off of their radar. Medicaid does not prorate the penalty. They will hit you with the same 100 percent penalty for a gift you made 59 months before you applied for Medicaid, as they will for a gift made the day before application.

Avoiding the Medicaid Gifting Penalty

Knowing this information about the Medicaid gifting penalty can give you the advantage of possibly avoiding the penalty. You can sidestep the $80,000 penalty by waiting a month to apply for Medicaid. You need the nursing home care, so move into the nursing home, but pay the $8,000 out of your private funds. After the first month passes and the $80,000 slides off the books, then apply for Medicaid nursing home assistance. Paying $8,000 is much cheaper than having to come up with $80,000 to pay for 13.79 months of care.

The Medicaid program is different in every state, so talk with an elder law attorney near you. This posting discusses the general law, which may not be the same as in your state.

References:

Forbes. “The Medicaid Penalty Period Explained.” (accessed January 21, 2018) https://www.forbes.com/sites/markeghrari/2014/08/08/the-medicaid-penalty-period-explained/#78e5b8912ee4

Paying for Senior Care. “What is the Medicaid Look-Back Period? What Penalties, Exemptions & Workarounds Exist?” (accessed January 21, 2018) https://www.payingforseniorcare.com/medicaid/look-back-period.html

What is the Difference Between Medicaid and Medicare?

“Many people are confused by Medicare and Medicaid. Their names are very similar, they are both government benefits programs and they both help older, low-income, and disabled people with medical expenses.”

Many people are confused by Medicare and Medicaid. Their names are very similar, they are both government benefits programs and they both help older, low-income, and disabled people with medical expenses. So, what is the difference between Medicaid and Medicare?

First , even though they have similarities, they are entirely separate programs. You might be eligible for Medicare only, or for Medicaid only, or for both programs. Use this table for a side-by-side comparison of the two programs.

 

 

 

Medicare	Medicaid
Insurance program.	Assistance program.
Many people pay premiums, co-pays, and deductibles.	The program does not have premiums, and people pay little for the benefits they receive.
The program participants paid into the program through paycheck deductions.	The program participants paid nothing to be eligible for the program.
It primarily serves retired workers who paid into the system for ten or more years.	It primarily serves low-income people, regardless of their age or whether they worked or paid into the system.
The money for the program is in a trust fund that contains the money the government takes out of our paychecks.	The money for the program comes from state and federal taxes.
This is run and administered by a federal agency, the Centers for Medicare & Medicaid.	This is a federal-state program. State and local governments run and administer the program, but they must follow federal guidelines. The federal guidelines allow states to make their own rules on some aspects of coverage, eligibility, and other matters.
Medicare is the same in every state.	Medicaid is different in every state.

The Medicare Program

You usually must be 65 years or older for Medicare.  However, if you are younger than 65, you might qualify for Medicare if you are disabled or on dialysis. Most people get Part A (hospital insurance) for free, but have to pay premiums for Part B (doctor and outpatient services insurance), Part C (Medicare Advantage plans), and Part D (drug coverage). Besides premiums, plan participants often must pay an annual deductible and event-based co-pays. You can have high income and plenty of assets and still qualify for Medicare, because it is not a needs-based program.

The Medicaid Program

Your age is entirely irrelevant for Medicaid. Your income and assets are the determining factors for eligibility. You must have low-income and only a few assets that Medicaid considers “countable” to qualify. Since Medicaid is an assistance program and not an insurance program, do not pay for premiums, deductibles, or co-pays. If you qualify for both Medicare and Medicaid, Medicaid can help pay some of your Medicare premiums, deductibles, and co-pays.

Which One Pays for Nursing Home Costs?

Medicare pays nothing for standard nursing home costs.  However, they will pay for a short-term stay in a skilled nursing facility (SNF), if it is medically necessary. Medicaid, on the other hand, pays for nursing home care. It pays for more people living in American nursing homes than any other single payer.

Since some programs can vary by state, talk with an elder law attorney near you. This article covers the general law.

References:

MedicareInteractive.org. “What is the difference between Medicare and Medicaid?” (accessed January 9, 2018) https://www.medicareinteractive.org/get-answers/introduction-to-medicare/explaining-medicare/what-is-the-difference-between-medicare-and-medicaid

U.S. Department of Health & Human Services. “What is the difference between Medicare and Medicaid?” (accessed January 9, 2018) https://www.hhs.gov/answers/medicare-and-medicaid/what-is-the-difference-between-medicare-medicaid/index.html

How Can I Qualify for Nursing Home Care?

How Can I Qualify for Nursing Home Care?

“An elder law attorney can guide you through the intricate Medicaid application maze and prepare a trust or other legal product that can help you retain some assets, without incurring a Medicaid penalty.”

Nursing home care is expensive – thousands of dollars a month – but if you need it, you have to figure out a way to pay for it. Most of us cannot afford to shell out $6,000 or $7,000 a month or more to a nursing home. If you do not have long-term care insurance or other funding, you may be wondering, How can I qualify for nursing home care?

Although every state’s Medicaid rules are different, the general rule is that you may be eligible for Medicaid nursing home benefits if you:

• Have a medical condition that makes nursing-home care necessary, and
• Meet the financial requirements for Medicaid

Functional Eligibility for Nursing Home-Level of Care

If you need help with the activities of daily living, you might meet the first requirement. The state will evaluate your ability to perform tasks, such as dressing, bathing, toileting, feeding yourself and getting in and out of bed and chair. The standards will vary by state, but the more help you need with these basic functions, the more likely you are to meet your state’s threshold for needing nursing home-level of care.

Medicaid Financial Requirements

Although there are no income or asset restrictions for Medicare eligibility, you cannot receive Medicaid benefits unless your income and assets are below the set limits. These limits can change every year. Your income and assets will have to meet the guidelines on the first day of every month to retain your Medicaid funding.

What to Do if Your Income is Too High

If you are not able to live at home safely because of your medical condition, some states will apply a different income limit for Medicaid nursing home qualification. In other words, the income limit can be higher based on your medical needs.

Many states have “spend-down” programs for people who have significant medical expenses and too much income to meet the Medicaid income guidelines. If you have to spend a lot of money every month on medical expenses, you have less money available to pay for your nursing home care. Spend down programs, also called “medically needy” programs, deduct your medical expenses from your income, which can bring you below the Medicaid income level.

When Your Assets Are Too High

Many common assets, such as your home, are not counted for purposes of Medicaid qualification. Be very careful about giving away some of your assets to fall below the Medicaid countable asset limit. Medicaid will look at your bank statements and other assets for the last five years before you applied for Medicaid. This is called the “look-back” period.

Medicaid has strict rules about giving away assets or selling them at below market value during the look-back period. If any of your transfers break the Medicaid asset transfer rules, they can impose a harsh financial penalty on you. The penalty can mean that Medicaid will not pay for your nursing home expenses for many months. They will use a formula to calculate the number of months you will have to pay for yourself, before Medicaid starts to cover you.

An elder law attorney can guide you through the intricate Medicaid application maze and prepare a trust or other legal product that can help you retain some assets, without incurring a Medicaid penalty. The Medicaid programs in every state are different, so you should talk with an elder law attorney in your area. This posting discusses the general law.

References:

Centers for Medicare & Medicaid Services. “How can I get Medicaid if I need nursing home care and have Medicare?” (accessed December 6, 2017) https://www.medicareinteractive.org/get-answers/programs-for-people-with-limited-income/medicaid-and-medicare/how-can-i-get-medicaid-if-i-need-nursing-home-care-and-have-medicare

How Can I Plan for Nursing Home Care Costs?

“To pay for nursing home costs beyond 100 or 190 days, many people turn to Medicaid, veterans benefits, relocation to a less expensive part of the country, long-term care insurance or reverse mortgages.”

You cannot count on Medicare paying for much, if you need nursing home care. Medicare can pay for skilled nursing care for a short period of time, but not for ongoing residential services. Medicare will also not pay for a nursing home admission for a chronic or long-term condition for which there is no cure. It will pay for you to recuperate (convalesce) briefly from an illness or injury. As you strategize for your financial future, you need to answer the question, How can I plan for nursing home costs?

Medicare will pick up the tab for 100% of the first 20 days and 80% for the next 80 days. If you have Medicare Supplement insurance, it will pay the other 20% for days 21 through 100. Neither Medicare nor Medicaid Supplement insurance will pay anything after 100 days, unless you are in a psychiatric hospital that is also a nursing home and you are there for a psychiatric condition. In that situation, Medicare will help pay up to 190 days.

Options to Pay for Nursing Home Care

To pay for nursing home costs beyond 100 or 190 days, many people turn to Medicaid, veterans’ benefits, relocation to a less expensive part of the country, long-term care insurance or reverse mortgages. You should consider different factors for each of these options.

Medicaid pays for more nursing home costs than any other agency or organization – around half of the total nursing home costs in America. Not everyone can meet the stringent financial requirements to qualify for Medicaid. You must be low income and have few assets to be eligible. Medicaid excludes many common assets, like your home, from counting toward the asset limit. There are ways to shift your income and protect your assets through estate planning products like trusts, but you should talk with an elder law attorney to find out your best options.

If you are a veteran or the spouse of a veteran, you may qualify to live in a state Veterans Administration (VA) nursing home. Every state and each nursing home has different rules for eligibility, so you will have to do your homework to find one that meets your needs and that is available for you. If you receive Aid and Attendance benefits from the VA, you cannot also live in a state VA nursing home.

Although it can be difficult to uproot yourself if your medical condition requires nursing home care, where you live can make a tremendous difference in the cost of nursing home care. The average cost of nursing home varies from a low of $147 a day in Oklahoma to $364 a day in New York to a stunning $800 a day in Alaska. The national average is $235 a day. With this variation in the expense, relocation can make your dollars go further.

Long-term care insurance is expensive, and as you get older, the premiums continue to rise. You are trusting that the company will still be in business decades down the road when you need them. At least one major long-term care insurance company liquidated in 2017 under court order. If you never need long-term care, you will get no benefit from all those premiums you paid.

Reverse mortgages and other financial products can offer more flexibility than long-term care insurance at a lower cost, but these products can also have downsides. Planning for nursing home care costs requires the consideration of multiple factors. The laws are different in every state, so you should talk with an elder law attorney in your area to decide on the best plan for you.

References:

Paying for Senior Care. “How to Pay for Nursing Home Care.” (accessed December 5, 2017) https://www.payingforseniorcare.com/longtermcare/paying-for-nursing-homes.html