Initially, Medicaid extended primary healthcare to poor people, especially children. However, over the years, it has dramatically expanded, and it now also funds long-term care in assisted living facilities, nursing homes, private homes, and other healthcare settings. While all applicants must satisfy the specified financial criteria, not every recipient will qualify for disability benefits under every program, because each program has its own eligibility criteria.
Knowing the Rules Is Important
The eligibility rules for nursing home care at Medicaid facilities are quite complex, and they are nearly impossible to navigate without professional guidance. This is why the uninitiated often spend everything on nursing home care, even though experienced attorneys can help most applicants protect their hard-earned savings and still qualify for funded long-term care.
Although federal rules set the basic standards, states have substantial leeway to fine-tune the available benefits and qualification requirements. Because these programs vary according to the state where you live, the planning should be based on your state’s law.
The individual would receive long-term care in the state where they live, and recipients who move to a different state must qualify there to continue receiving services. Therefore, planning may become challenging when seniors move from one state to another.
Depending on the extent and kind of impairments a person has, individuals can receive long-term care in several different types of environments. However, most people prefer either a nursing home or assisted living facility. Fortunately, Medicaid funds all of these arrangements in certain situations. It is also important to know about the appeal process if your initial claim for long-term care benefits is denied.
Eligibility Requirements for Long-Term Care Benefits
To qualify for long-term care benefits, an individual must demonstrate a medical need and satisfy specific financial requirements. These benefits may fund assisted living, nursing home, or at-home care when an applicant’s resources and income do not exceed modest limits.
The countable income and resources include cash and other available assets to pay for food and shelter. Medicaid has a few exemptions of assets that would not qualify as taxable income, such as Social Security funds and tax-exempt interest, security deposits, and jointly owned property.
An applicant who is not married can qualify for Medicaid-funded long-term care by reducing their countable resources to the applicable resource cap, which is usually a few thousand dollars. However, planning for long-term care can be more complicated for married people because their combined countable resources are considered together.
When only one spouse needs care, half the combined countable resources up to a cap are allowed to the spouse in the community. This community spouse resource allowance (CSRA) is intended to protect the spouse at home from becoming impoverished. In high-cost states, Medicaid planning to protect savings is essential to afford a community spouse a reasonable standard of living.
Because couples typically must dissipate nearly all their countable resources beyond the CSRA before Medicaid pays nursing home charges, many people mistakenly believe that they must lose everything else when a loved one needs long-term care. However, this merely illustrates the risks of acting on limited knowledge. Because excess countable resources need not be “spent down” for the purpose of qualifying for long-term care, there are several ways families can preserve assets.
Medicaid separates assets into three different categories:
Countable assets are those that could be turned into cash to pay for nursing home costs. This category includes your primary residence, checking and savings accounts, CDs, brokerage accounts, annuities, and retirement accounts. Countable assets may also include any substantial gifts you have made within the past five years. The relevant rules state that these are the assets you need to spend down to pay the monthly nursing home cost.
Exempt assets are those that, if you are married, you can keep without having to turn them into cash to pay for nursing home costs. If you are married, these exemptions may include personal property, primary residence, one car, and pre-paid burial/funeral contracts.
Unavailable assets have value but will not have to be liquidated to pay for long-term care. There are strategies that planners can use to protect a significant portion of these assets from the Medicaid spend-down rules. These strategies include:
- Turning a countable asset into an income stream that is specially structured to comply with the rules
- Turning a countable asset into an exempt asset
Care and Coverage Options
Nursing homes often have a poor reputation, possibly because of their institutional look and feel. However, nursing homes are usually the only option for people who need substantial assistance. Assisted living facilities are an intermediate step that is more similar to a senior citizen apartment building, with activities, dining, and helpers on site.
Assisted living facilities offer more comprehensive amenities than nursing homes, but they usually do not accept people who need substantial aid. In most situations, only limited care is available. Because round-the-clock professional care is costly and coverage is modest, home care is more helpful when provided primarily by the family, with paid home health aides as supplements.
Medicaid is divided into two broad categories: long-term care and other types of care. Other types of care include preventive medicine, standard diagnostics, surgeries, and medical treatments. Long-term care through Medicaid covers nearly all nursing home costs, most assisted living facility charges, home health aides, and other expenditures to help individuals remain in a private home.
Things are very different for long-term and short term disability insurance. It is important to know all the details before making any decisions. However, while all applicants must satisfy certain financial eligibility criteria, people who seek long-term care Medicaid benefits must also demonstrate that they cannot live independently without skilled medical support.
Medicaid rules can be complicated to understand, especially for people without experience navigating them. To learn about the options available, you can consult an experienced professional to discuss the disability claim process.