Medicaid is a government benefit program that pays for part of the cost of your long term care in a skilled nursing facility (a “Nursing Home”). In most cases, you have to contribute your monthly income (less a small allowance for personal needs). Some benefits are available for at-home care.
Medicaid Planning is the process of legally arranging your assets to become eligible for Medicaid. In many cases, you can preserve your house and much of your money and still obtain Medicaid benefits.
Nationwide Elder Services Associates, LLC (“NESA”) helps people navigate the Medicaid Planning rules, which are tricky and impenetrable at best. NESA is proud to have helped thousands of people for more than 23 years to keep their homes and lots of their money when they had a loved one who needed long term care.
However, we are most proud that our compassion and empathy have made it possible for us to give peace of mind and a high degree of comfort to those we serve. NESA truly cares for you.
Medicaid benefits are available only to individuals who meet the Medicaid eligibility standards. There are seven parts to the Medicaid eligibility rules and you must qualify under all seven parts.
1. The applicant for Medicaid must actually need long term care in a skilled nursing facility (a “Nursing Home”) or, in limited cases, at home.
Usually the Nursing Home does a medical assessment automatically when an application for Medicaid benefits is made. NOTE: to avoid delay, make sure the assessment has been made and sent to Medicaid.
2. The applicant must be 65 or older or disabled.
3. The applicant must be a citizen of the USA or equivalent.
4. The applicant must already be in a nursing home in the state in which the applicant applies for Medicaid benefits.
5. The applicant’s monthly income (what you get every month, including your Social Security, pension, salary, interest, dividends, etc., but not including the spouse’s income, if any) must be less than the federal standard after medical expenses have been subtracted.
In some states, the cost of Nursing Home care is considered to be a medical expense. There are different rules for other states.
i. Scenario 1- “Medical expense” includes Nursing Home cost: your income is $6,000.00 per month and Nursing Home cost is $5,000.00 per month. Your income will not make you ineligible becauseincome ($6,000.00) less medical ($5,000.00) is less than the standard.
ii. Scenario 2 – “Medical expense” does not include Nursing Home cost: your income is $6,000.00 per month, which is higher than the standard, so your income makes you ineligible. However, by using a legal device called a Qualified Income Trust or Miller Trust, you can still become eligible.
6. The applicant’s total COUNTABLE assets (what you own) must amount to less than $2,000.00 in many states or $1,500.00 or $2,400.00 in others. For married couples, the countable assets include assets owned by the applicant, the applicant’s spouse, and assets owned jointly.
Special rules for married couples allow them to keep more of their assets and possibly even some of the applicant’s monthly income.
Some assets are never counted. Some assets are temporarily exempt and are not counted when determining initial eligibility. Some assets are not available and are not counted when determining initial eligibility. See the section on Medicaid Planning below.
7. Even if all of the other criteria stated above have been satisfied, certain gifts or transfers for less than fair market value will make the applicant temporarily ineligible for Medicaid benefits anyhow.
Medicaid will review all gifts made within five years before the “trigger date”, which is the date on which the applicant resides in a Nursing Home, applies for Medicaid and would have been eligible for benefits but for the gift. Based on the size of the gift, when it was given away and the average cost of the Nursing Home care determined by the state, there may or may not be a period of ineligibility for benefits after the “trigger date.”
Gifts made more than five years before the “trigger date” do not cause ineligibility. However, if Nursing Home care or care at home and Medicaid benefits are needed within five years after the date of the gift, the gift may well cause ineligibility for a very long time.
A gift to a spouse does not normally cause ineligibility. Neither does a gift to a Trust for the sole benefit of a disabled child. In some circumstances, the gift of a home will not cause ineligibility. Finally, if you honestly try to sell an asset and can’t or you make a gift exclusively for a reason other than to become eligible for Medicaid, the gift will not cause a period of ineligibility.
Upon the death of a person who has received Medicaid benefits, the state government has to try to recover the amounts paid to a Nursing Home for that person. In some states, recovery is permitted only from the “probate estate” of that person, i.e., the assets left under the individual’s Will or if the individual had no Will; while in other states, recovery is permitted from everything in which the individual had a legal interest one second before death.
Under certain circumstances, Medicaid law allows individuals or their spouses to keep their homes and some of their assets without becoming ineligible for Medicaid benefits. For example, an individual could give away certain assets without causing ineligibility or could make certain assets unavailable so that they wouldn’t count against the asset standard.
However, the relevant laws are extremely complicated and extremely hard to understand, so Medicaid Planning should not be attempted without the assistance of a Medicaid Planning specialist.
Just remember this: You don’t have to go broke to get Medicaid benefits.