Medicaid and Nursing Homes
Medicaid Facts as they Relate to Nursing Homes
- State and Federal programs offer Medicaid to help pay nursing home costs for those with limited income and assets. Individual eligibility varies in each state.
- Medicaid pays for nursing home care in a facility that's certified by the government to provide services.
- If you qualify for Medicaid, you're able to get state help to pay for nursing home care.
- Not all nursing homes accept Medicaid payment. Check with the nursing home to see if it accepts Medicaid, and if a Medicaid bed's available when you need care.
- Most people must pay down their personal resources on medical care before qualifying for Medicaid.
To learn about your State's requirements, visit SHIP for your State Medicaid office.
Paying for Nursing Home Costs with Medicaid
What to know about Medicaid
If you have limited assets and a low-income, Medicaid might help you pay for nursing home care. Your State Medicaid program has flexibility in its benefits and eligibility criteria. The nursing home services provided and paid by your state differ in the types of long-term care available. Most include medical and personal care services for people living with a disability or illness, regardless of age.
The nursing home resident may need to pay for help with bathing and dressing, along with medical treatment, depending upon the Medicaid rules that exist in your state.
Overview of Medicaid Services Paid by the State
It's a federal requirement for states to pay select Medicaid services to recipients in nursing home facilities. The federal government also requires states to pay for home health care services for those qualifying for skilled nursing care at home.
These long-term care services at home include home health aides and in-home services to help with housekeeping and medication management.
Do All Nursing Homes Accept Medicaid?
Not all. It's up to you to find out before selecting a nursing home or assisted living facility. While researching facilities, ask if they take Medicaid patients. One that does receives licensing from the state Medicaid office and subject to periodic inspections to ensure that the facility meets federal standards.
For those who are not elderly but qualify for Medicaid assistance, your long-term care expenses might be paid too. Children and young adults, living with a form of mental illness or physical disability and needing nursing home care, can receive Medicaid if they meet the state's eligibility criteria.
States have different rules to determine when long-term care is medically necessary, but all states require a doctor to certify that your needs be given in a nursing facility.
State Financial Medicaid Eligibility
Each state has different income and asset eligibility requirements, but all use similar guidelines for the limits set by the federal Supplemental Security Income program (SSI).
What are the Income Limits?
A Medicaid recipient can make up to 300% of the SSI income limit and still qualify for nursing home care that's paid by Medicaid. 300% of the SSI limit is $2,130 per month in 2013. The income differences depend on the type of care that's needed:
For example, the services covered by in-home care and home and community-based waiver services, have a lower monthly income limit than the services offered by a nursing home.
Your State Medical Assistance office is the best source for information about how to qualify for Medicaid in your state.
States using SSI requirements caps the countable assets at $2,000 for one person. For married couples, its $3,000, if both receives care.
What's Not Counted in SSI/Medicaid?
- The state can't put a lien on your home if there's a chance you'll return home after nursing home care.
- The state can't claim a lien on the home if you have a spouse or dependents living there.
- The home cannot be sold or held to recover benefits if you qualify to receive Medicaid for nursing home care.
After the recipient passes away, the state can retrieve the paid benefits from the person's estate in some cases, so check with your State Medicaid office to make sure you or your heirs are not caught short.
What other conditions exist that eliminate retrieval of paid benefits?
- When a spouse, brother or sister, a blind or disabled child or a child under the age of 21 has equity or an interest stake in the home, so long as that person resided there at least one year before the nursing home admission.
- The amount of allowed home equity ranges from $525,000 to $750,000.
If your assets put you over the Medicaid limit, you must comply by:
- Spending down your assets below the Medicaid limit.
- Entering the nursing home as a private payer, and then apply for Medicaid once assets meet the limit.
How to Transfer Assets Legally to Meet Medicaid Limits
In order for people to qualify for Medicaid, they must reduce their assets but there are federal rules for each state to follow when counting assets. States must allow married couples to protect a certain amount of assets and income when one of them is in a nursing home and the other is not.
- When spending down your money and assets, you can apply it to anything, not just on care, but you cannot give your assets away for less than they're worth.
- Non-countable assets include the home, a car, personal effects, household goods and furnishings, some prepaid funeral and burial arrangements, and limited cash ($3,000 for a couple).
- Pay off a legitimate debt that you or a spouse is legally obligated to pay; credit cards, mortgage payments, medical bills, taxes, car payments, rent, utilities, and the costs of home or car maintenance.
- Purchase a new home if it meets the requirements of exemption.
- Pre-payment of certain funeral and burial expenses.
- Invest in an annuity for a spouse's guaranteed fixed income.
- Make improvements to an uncountable asset; like a home. Those include plumbing repairs, home improvement projects, repairs to a roof, installation of a new roof, and landscaping.
- Make repairs to an automobile.
Medicaid's look back is five years. To fully grasp which assets are exempt and pay down are acceptable, and to what extent, check with your state's Medicaid program.
If Medicaid finds that you've transferred your property for less than its worth, you'll get penalized which makes you ineligible.
It's Medicaid's goal to drive recipients to first pay privately for nursing home care, and then eventually qualify for Medicaid.
For more information, call your State Medical Assistance (Medicaid) office. You can also call your local Area Agency on Aging to find out if your state has any legal services where you could get more information.
Medicaid Estate Recovery
If you're permanently institutionalized, living in a nursing home, before 55 and receive long-term care through Medicaid, the state's program has a claim against your estate after your death for the amount that the state spent on your care.
The state will not recover the benefits paid out from the estate until after you spouse dies and only if you have not left any minor or disabled children.
Spousal Protection - When one spouse enters a nursing home and applies for Medicaid, eligibility determined under "spousal impoverishment" rules. This means the federal law protects spouses of nursing home residents from losing all of their income and assets to pay for nursing home care - protecting resources.
Spousal impoverishment makes sure the spouse, living at home, has the money she needs to pay for her own living expenses.
Each state has a "spousal protection" rule so that the healthy spouse can continue to live in the community. It allows the healthy spouse to keep $22,000 to $110,000 in assets, depending on the state.
Contact an Elder Law Attorney to Help You Qualify
You or your loved one may apply for Medicaid and keep the home in the family by adding a child's name to the deed at least five years before applying for Medicaid, or by setting up an asset-protection trust before applying. It allows the senior to transfer some property (home or cash assets) to another to manage for them. When considering this strategy, hire an elder law attorney to help.
Locate a qualified attorney by calling the local bar association or visit The National Academy of Elder Law Attorneys online search tool to find one near you.
Applying for Medicaid
To apply for Medicaid, call your State Medical Assistance (Medicaid) office. They can tell you if you qualify for the Medicaid nursing home benefit or other programs, such as the Programs of All-Inclusive Care for the Elderly (PACE), or home and community-based waiver programs.
After seven years of helping her aging parents, Carol Marak has become a dedicated senior care writer. Since 2007, she has been doing the research to find answers to common concerns: housing, aging and health, staying safe and independent, and planning long-term.
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