Long-term care, whether provided in a private home, a nursing home, an assisted living facility or a continuing care retirement community, is expensive. According to the 2020 Genworth Cost of Care Survey, the median national rate for a private room in a nursing home is over $100,000 a year.
Many family caregivers and seniors assume these costs will be taken care of by Medicaid, the jointly funded federal and state program that provides health insurance for people with low income and limited assets. When it comes to long-term care, this public assistance program does pay for the largest share of these services, but only if a senior meets strict financial and functional requirements. Medicaid is administered by each state, so keep in mind that criteria can vary considerably from one state to another.
Eligibility Requirements for Long-Term Care Medicaid
The most basic and universal requirements a person must meet to qualify for Medicaid include being a U.S. citizen (or a qualified non-citizen) and meeting residency rules in the state where the applicant intends to apply.
Additionally, an applicant must:
Medical and Functional Criteria for Medicaid Long-Term Care
To receive institutional long-term care services paid for by Medicaid, an applicant must need a “nursing home level of care.” A medical specialist in the state conducts a needs assessment of the applicant and determines if they require care in a nursing home, care in an assisted living facility or if they are a candidate for home- and community-based services (HCBS) like in-home care services and adult day care. HCBS are a slightly different type of Medicaid program aimed at delaying or preventing applicants’ placement in institutional facilities like nursing homes. These services are typically provided through Medicaid waivers, which allow applicants to receive appropriate services in their own homes and communities.
Each state defines its own nursing facility level of care criteria, and the explanations are often very complex or vague. However, the requirements for meeting a nursing home level of care typically include a combination of medical, functional and cognitive components.
Medically, an applicant may need to be certified as requiring skilled nursing care from a licensed nurse (e.g. assistance with injections, IVs, catheter care or other medical devices and treatments). An applicant’s functional level is commonly determined by assessing their ability to perform activities of daily living (ADLs). An evaluation is completed to identify how much assistance is needed with the following daily activities: eating, bathing, dressing, continence, toileting and transferring/mobility.
Criteria relating to cognitive abilities are often more difficult to define and quantify. Many states account for the special long-term care needs of seniors with neurodegenerative conditions like Parkinson’s disease, Alzheimer’s disease and other forms of dementia in their nursing home level of care requirements. However, even if dementia-related symptoms like memory loss are not specifically mentioned in a state’s Medicaid guidelines, progressive neurological conditions increasingly take a toll on a senior’s health and ability to function independently.
Medicaid Long-Term Care Financial Eligibility Requirements
Medicaid is a program designed to help individuals with low incomes and limited assets get the health coverage they need, so state Medicaid programs set strict income and asset limits when determining whether applicants qualify financially.
Medicaid Income Limits
Some sources of income are counted by Medicaid, while others are not. Income limits vary by state and are typically based on the Social Security Administration’s set federal benefit rate. The hard income limit for Medicaid in 2020 is $2,349. Some states have “medically needy” programs that allow seniors who are over this limit and have high medical bills to still qualify by “spending down” their excess income.
Medicaid Asset Limits
Medicaid defines specifically what is included in asset limits, while other assets are considered non-countable assets. Exempt assets include the applicant’s primary residence, their personal belongings, one motor vehicle, property essential to self-support, whole life insurance with a face value under $1,500, certain prepaid burial arrangements and assets held in specific kinds of trusts.
Unless specifically excluded, any other real or personal property is counted in the Medicaid eligibility determination. The general asset limit for Medicaid in most states is $2,000 but may be higher in some states. Different rules and limits apply for married couples where only one spouse is applying for long-term care covered by Medicaid.
Part of determining a senior’s eligibility is a five-year look-back at their financial statements. Any indication that an applicant has transferred assets for less than fair market value (FMV) in the five-year window prior to their application will disqualify them and trigger a penalty period.
Understanding the Medicaid Look-Back Period and Penalty Period
If a person has reasonable income and assets but meets Medicaid’s medical and functional criteria, they must typically pay for care out of pocket until their assets have been significantly diminished to Medicaid limits.
It is important to seek more detailed information and guidance from an attorney before initiating any kind of spend down strategy for income or for assets. Medicaid planning is not a do-it-yourself project.
What Services Does Long-Term Care Medicaid Cover?
Medicaid Long-Term Services & Supports can be provided in a variety of settings, but some seniors’ needs are best met in an institutional setting. If a senior resides in a nursing home, the Medicaid beneficiary must reside in a Medicaid-certified nursing facility for their care to be covered. States may specify the types and limitations of some services that can be provided, but federal regulations require that certified nursing homes must offer specific services at a minimum and at no charge to Medicaid residents.
All states have at least one program that allows Medicaid beneficiaries to receive medically necessary care and personal care services in their home community. Community Medicaid services are designed to help seniors stay in a home setting as long as possible. Residents can receive these services in a group residential setting, their personal home, or in the private home of someone else, such as a family caregiver. Additionally, some states allow the beneficiary to direct who provides the care services, including the selection of a family caregiver. Skilled care provided by licensed health care providers is covered by every state plan, however the additional non-medical programs covered by Community Medicaid and availability of those services varies widely by state.
Institutional Medicaid Covers
Applying for Long-Term Care Medicaid
Generally, nursing home planning and Medicaid planning is an aspect of the services provided by Elder Law attorney. A lawyer who devotes a substantial part their practice to long-term care planning will have more knowledge and experience to address the issues properly. For more information, or if you have additional questions or concerns about long-term care and Medicaid, contact experienced elder law attorney Bob Michaels to schedule an appointment.
You can also learn more HERE.
Other sources of information provided below:
Medicaid Institutional Long-Term Care
2020 SSI and Spousal Impoverishment Standards
Medicaid Nursing Facilities
For more information, if you have additional questions or concerns about long-term care planning, contact experienced estate planning attorney Bob Michaels to schedule an appointment.
Bob Michaels is extremely passionate about providing the best possible legal experience for his clients, and focuses his practice on elder law, estate planning, business, and real estate matters. Bob has been able to provide piece of mind and a solid foundation to many folks in the Puget Sound area over the years and wants to provide resources and relevant information whenever he can.
Original article can be found HERE.