Do I really have to lose everything first?
Medicaid is a joint federal-state program that helps people pay for nursing home care when they cannot pay themselves.† Currently Medicaid pays for over half of nursing home care in America.† Persons who are disabled, blind, or aged are eligible for Medicaid benefits once they meet certain financial criteria.
Additionally, if you are at a minimum income level with minimal assets, you may be eligible.† Not all states require spend-down or depletion of assets before you qualify, but they do all have eligibility guidelines.
Once a person is on Medicaid, his or her income is applied to the nursing home rate for care for that particular facility or used to supplement the married spouse still living in the community if the income is below the minimum monthly allowance according to the standards established by Medicaid and the federal government.
Under the Medicaid program, states administer Medicaid benefits under federal guidelines that allow each state to set their own eligibility criteria as well as the types of services covered and the application process.††
Keep in mind that Medicaid rules and regulations are very complicated and vary from state to state.† This section is designed to give you a broad understanding of Medicaidís entitlement program and benefits.† To get more specific information, contact your local medical assistance department, social services, or area on aging.† Here are State Medicaid Agencies.
You will see that the conditions change depending on whether or not you have certain financial and physical assets, married with your spouse living in the community.† Medicaid does not consider the assets of your immediate family, i.e., childrenís, brother, or sisterís assets.††
To be eligible for Medicaid, you may have to spend down your assets before your are approved.† For instance, if your are single, you must exhaust your assets down to a mere $2,000 in assets with the exception of $1,500 which you are allowed for a burial fund.
Once your assets are exhausted to the limits of Medicaidís standard, you become eligible. Assets are not the only factor considered, some states also take your financial resources or income into account.† Many states have a cap on how much income you can have before you become eligible for Medicaid.
However, bear in mind, many states will also entitle you to Medicaid benefits if your income is slightly above the cap required for eligibility.† The requirement is that you spend down your assets or financial resources by using it to pay for deductibles and co-payments not reimbursable by your insurance, Medigap policies, or Medicare Part B services.
In order to meet the financial limits for Medicaid eligibility, married couples often have to deplete their assets and resources almost to poverty level.† When one spouse in a relationship has to enter a nursing home, this can often result in serious financial strain for the other spouse living in the community.
To prevent this from happening, states under federal guidelines, now allow for the protection of some assets needed to sustain the community spouse.† This limit is currently one-half of all assets owned individually or by both persons.† All assets in this category are referred to as exempt assets and are not factored into the limitations set for eligibility criteria.† These exempt assets include one car, the principle residence, personal items, and a burial fund of $1,500 and may be adjusted each year.
How much is a community spouse allowed to keep?† The spouse is allowed to keep a basic monthly allowable income of up to 150 percent, plus a basic shelter allowance as long as both are within the limits of the inflation-adjusted cap.† This amount was $2,232 per month in the year 2002.† This is based on the poverty level established by the federal government for two people.†††††
There are essentially two ways to meet the standards of Medicaid and qualify for nursing home entitlements. (1) You must legally structure your assets or transfer them to other people such as family, or others. Or (2) You must spend down your financial and physical assets with exception of those assets legally exempted according to the rules of your state.
When you apply for Medicaid, states are required to determine if you have otherwise sold, transferred, or liquidated any of your assets in the past 36 months from the date of application.† If they find discrepancies, they may delay your eligibility and you may be delayed nursing home care.
Should you decide to transfer your assets into an irrevocable trust as a means of asset protection, it is advised that you seek the legal advice of an estate attorney or a financial advisor.
Once you are officially on Medicaid, all income is then turn over to Medicaid except:
∑ A small personal allowance.
∑ A dependent allowance.
∑ Home maintenance allowance if you plan to return.† And,
∑ Allowance for Medicare and other insurance premiums needed to help pay for health services not covered under the Medicaid plan.
To apply for Medicaid, you will have to submit an application to you local department of social services or public assistance office.† Once you have submitted an application, you will then be scheduled for a personal interview to discuss your eligibility.† You or your legal guardian should attend this interview.† At Iron County Nursing Home we have a person whose responsibility is to assist families with this and other application processes.
When you call to make your appointment be sure to ask what you will need to bring along, i.e., support documentation, such as birth certificate, Social security card, naturalization or immigration documents, verification of income to include, Social Security, pensions, interest and stock dividends, bank account statements and credit union statements for the past 36 months, savings bonds, stock accounts, life insurance, health insurance, certificates of deposit, and any receipts from the sale of a home or other assets.† If these are not available the day of the interview, they may be provided later.† The application process cannot go longer than 90 days.