What you need to know when applying for Medicaid

Introduction:

Medicaid is a federal and state health care safety net for low income families, the disabled and seniors. Since it is funded jointly by the federal and state governments, there is much variation among the states as to what services are covered. Many services are mandated by the federal government and other services are up to the discretion of each state.

Does Medicaid pay for nursing home care?

Yes, Medicaid does provide for seniors to receive nursing home care as well as assisted living and, in many states, in home care. There are many rules and regulations, though, for the states to determine the financial and medical eligibility status of an individual.

Is there an income cap on Medicaid?

As mentioned, there is much discretion in the services provided by the individual states as well as the eligibility guidelines. As an example, in NJ the income limit is currently $2,199.00 in order to qualify for institutional Medicaid, while in CT there is no income limit for nursing home care. Some states also have options to utilize certain income trusts to deal with surplus income. Eligibility guidelines are also subject to change often and it is therefore advisable to seek the guidance of a Medicaid planning expert.

What liquid assets count for Medicaid eligibility?

Asset limits, like income limits, vary considerably from state to state. For example, in CT an individual can keep a total of $1,600 in assets, whereas in NY one can keep only $14,850 in total assets.  In California, though, Medical allows one to keep as much as $2,000. There are other ways for an individual to preserve assets if proper planning is done in advance. Here are some assets which are counted towards the state asset limit:

  • Checking, savings or money market accounts
  • Life insurance policy with a face value of $1,500 or more
  • Any real estate besides for the primary residence
  • Stocks, bonds, mutual funds

What assets are excluded?

Here are some of the assets not counted for eligibility:

  • Burial plot
  • Personal Possessions
  • Irrevocable prepaid funeral
  • One vehicle, among other exceptions
  • A life insurance policy with no cash value or a face value of less than $1,500
  • Primary residence if the Medicaid recipient is living in it and is not in a care facility

What happens to our house once my husband is admitted to a nursing home?

Well, Medicaid does allow for the community spouse to remain living in the primary residence once the Medicaid recipient has been admitted to the nursing home. Any secondary residence or vacation home will be considered countable assets, as mentioned above.

Note: A home may be subject to estate recovery once the spouses pass away.

What can I do to keep our assets once my spouse is admitted to a nursing home?

Typically, Medicaid will split all the assets and the community spouse will receive half of the total up to a maximum decided by each individual state ($119,220 in NJ).

So for example, if the total is $100,000, the community spouse will get $50,000. $2,000 ($2000 is the NJ State asset limit) will be given to the nursing home resident and the remaining $48,000 of the resident’s portion will need to be spent down in order for the applicant to achieve Medicaid eligibility. These funds can be used for qualified purchases, like, home repairs, a vehicle for the community spouse, an irrevocable funeral or burial plot, and more.

 

Photo by Images_of_Money -(cc)

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About Tim Colling

Tim Colling is the founder and President of A Servant's Heart In-Home Care, which provided in-home caregiving services in San Diego County, and also of A Servant's Heart Geriatric Care Management, which provided
professional geriatric care management services and long term care placement services in San Diego County. Tim has more than 30 years of experience in management in a variety of industries. He held a Certified Care Manager credential from the National Academy of Certified Care Managers. Tim is also a Certified Public Accountant (retired), and received his Bachelor’s Degree in Accounting from California State University at San Diego. In addition to writing blog posts here for the Servant’s Heart blog, Tim also is a regular contributor to HealthLine.com and to FamilyAffaires.com as well as blogs of other eldercare services provider companies. Finally, Tim is also the president of A Servant's Heart Web Design and Marketing, which provides home care marketing as well as website design and online marketing for those who serve the elderly and their families.