|One of the primary reasons a person seeks the assistance of an elder care attorney is to explore what government assistance programs are available to assist with paying for long term care. There are basically three ways to pay for long-term care: private pay, long-term care insurance, and Medicaid. Medicare covers only the first twenty days of skilled nursing care following a hospital stay and then the patient is responsible for part or all of any cost beyond these first 20 days. Medicaid provides nursing home care on a skilled or intermediate level as well as community-based services in some states. Furthermore, in some states, Medicaid can also be used to help cover the cost of assisted living facilities. Medicaid helps to pay for long-term care by covering the majority – if not all – of a nursing home resident’s monthly bill. A nursing home resident on Medicaid may only be responsible for paying a portion of her/his income to the facility as “patient liability.” The type of Medicaid that covers long-term care may be referred to by various terms such as nursing home Medicaid or Aged, Blind, and Disabled (ABD) Medicaid.
Medicaid is a program jointly funded by the federal and state governments. Congress enacts the laws that the states then interpret and administer. The name of the state agency that interprets and administers the laws varies from state to state. Contact your state Medicaid agency to learn more about your state’s programs and eligibility requirements. Eligibility is determined using three criteria: (1) non-financial requirements; (2) income level; and (3) countable resources limit.
Non-financial Requirements of Eligibility
The person applying for Medicaid must meet the basic non-financial requirements as detailed below.
Aged is defined as 65 years or older;
Blind is defined as “a central visual acuity of 20/200 or less in the better eye with the use of correcting lens, or a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater than 20 degrees”; OR Disabled is defined as the “inability to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment(s) which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.”
Citizenship/Alienage An applicant must be a US citizen or legal alien who entered the United States prior to August 22, 1996 or a qualified legal alien.
Enumeration. A person must apply for and receive a Social Security number.
Residency. The applicant must be a resident of the state in order to be eligible for Medicaid in that state.
Third Party Resource Assignment. Medicaid applicants and recipients are required to provide information regarding third party resources (TPRs) available to the applicant. Rights to TPRs must be assigned to the Medicaid agency.
Financial Requirements for Eligibility
An applicant must meet both an income test and a resources requirement. The specific numbers will vary from state to state. For eligibility purposes, Medicaid will review the gross income of the person who is applying for Medicaid. Gross income is income from any source. For example, income from Social Security, pension, retirement, rent, loan repayments, annuities, etc. For a married person, Medicaid will consider ONLY the applicant’s income when determining eligibility for nursing home Medicaid. However, they will also consider the income of any community spouse because if it is under the “Maximum Monthly Community Spouse Maintenance Needs” figure for a particular year, the community spouse is entitled to a diversion of some of the institutionalized spouse’s income.
If an applicant’s gross income is less than the “Income Cap Amount,” then the applicant is eligible for Nursing Home Medicaid based on income. If an applicant’s gross income is more than income cap, then the applicant will not be eligible for Medicaid benefits unless he/she resides in a state that permits qualified income trusts (QITs, also known as a Miller Trust). A qualified income trust – once established and funded – will allow an individual’s income that exceeds the income cap to be transferred to the trust and maintain Medicaid eligibility. The income in the trust must then be used specifically for the person’s personal needs allowance, supplemental health care expenses, spousal diversion, and nursing home patient liability costs.
Eligibility for Medicaid also depends on whether the applicant meets the countable resource standard. A single individual may not have more than $2,000 and a married couple wherein only one of them is applying for Medicaid cannot have more than $125,600 (2018 figures) of countable resources.
Exempt Resources: A Medicaid applicant is permitted to have certain types of resources without them jeopardizing eligibility. These will vary from state to state, but some examples include: the residential home place; one vehicle regardless of value; and promissory notes that meet both the federal and state standards.
Countable Resources: All other resources that a person has other than exempt resources count toward the permissible limit of either $2,000 or $125,600. Countable resources include all cash accounts, stocks, bonds, multiple vehicles, secondary homes or land, annuities, collectible items, life insurance policies, etc. Essentially anything that has cash value.
Transfer of Resources Calculations and Penalties
If an applicant gives away or sells resources for less than current fair market value (FMV) during the look-back period, the applicant may be subject to a transfer of resource penalty. To calculate the penalty period, which is the number of months a person is ineligible for Medicaid benefits due to such a transfer, the value transferred is divided by the particular state’s penalty divisor. The ineligibility period will begin the date on which the individual is eligible for medical assistance and would otherwise be receiving Medicaid nursing home benefits BUT FOR the transfer of assets and the application of the penalty period.
The current look-back period for determining eligibility is five (5) years under the Deficit Reduction Act of 2005. All transfers of assets that were accomplished on or after February 8, 2006 – the effective date of this legislation – will be subject to the look-back period of five years. The penalty applies to gifts made to churches and for special occasions, such as birthdays and Christmas.
So WHY do we assist our clients with preservation of assets while availing our clients the ability to get Medicaid? It’s all about quality of life while they are here. Our clients find themselves living in nursing homes rather than their own homes. A choice none of us would make if we could avoid it. Good long-term care insurance policies are becoming increasingly rare and many people that elder care attorneys serve do not have or can’t afford such policies. If a person who lives in a nursing home runs out of money and then by default goes onto Medicaid, they will not have any money to purchase items that mean so much on a day-to-day basis that maintains their quality of life. Neither Medicare nor Medicaid pay for dental care; foot care; proper wheelchairs or beds; taxes, insurance or maintenance on a house that still exists, etc. Literally, residents of a prison receive better health care and quality of life opportunities.
NOTE: Medicaid is administered by both Federal and State agencies. Due to The Social Security Act of 1972 some states have lower asset limits than the $2,000 and $125,600 quoted. Please check with your local Medicaid agency for particulars of Medicaid eligibility that are specific to your state.
|Victoria L. Collier, JD, CELA, is an estate planning, veterans benefits & Medicaid crisis attorney for The Elder & Disability Law Firm of Victoria L. Collier, P.C. She is admitted to practice before the United States Supreme Court and the United States Court for Veterans Claims. Ms. Collier was appointed by Governor Sonny Perdue for the Georgia Council on Aging Board. She is Co-Founder of the Veteran’s Advocates Group of America (VAGA), a member of the National Academy of Elder Law Attorneys (NAELA) and a former Chair of the Elder Law Section of the State Bar of Georgia. She is Co-Author of “Don’t Go Broke in a Nursing Home,” published by AFFC Publications, 2014 Georgia Edition. Ms. Collier earned her B.A. degree from Valdosta State University and her J.D. degree from the University of Nebraska.
Sabrina A. Scott has worked in the legal field since 2012 when she became the Medicaid and VA paralegal at Victoria Collier’s law firm in Decatur, Georgia. Since then Sabrina has developed an expertise to the extent that she now assists and trains attorneys across the United States with VA non-service connected pension claims. In 2017, Sabrina also began a new joint venture with Victoria Collier in the form of Red Feather Financial, a company that transforms traditional retirement assets into potential long-term care income. For this reason, Sabrina is also licensed in life and health insurance as well as holds a Series 65 so that she can assist clients by leveraging their assets in the form of products like annuities and life insurance policies that have optional income streams for long-term care.