MEDICAID
Medicaid is a joint federal and state program
that provide medical and long-term care for those with limited
assets. It is available to certain individuals who are under age 65 and
to seniors who have Medicare coverage. Medicaid will provide coverage for
services not otherwise covered by Medicare. Medicaid provides a broad
range of services which includes:
- Hospital and
nursing home care
- Physician
services
- Home care
- Dental services
- Vision services
- Prescription
drugs
- Hospice care
The amount of income that a Medicaid recipient is permitted to
have depends upon whether the recipient is living at home and receiving home
care or is in a nursing home. A recipient living at home is considered to
be living in the community. The income standard for community Medicaid
recipients is approximately $700.00 per month for an individual and $1,000.00
per month for a couple. However, if a recipient is living in a nursing
facility, she is only permitted an income, with certain exceptions, of $50.00
per month. Income in excess of these amounts is considered surplus
income. Surplus income does not, in and of itself, prevent the receipt of
Medicaid benefits; however, monthly surplus income must be paid by the Medicaid
recipient in order to receive Medicaid benefits.
Those individuals receiving community home care Medicaid benefits
can take steps to protect their surplus income. In many instances,
Medicaid will permit the establishment of a pooled income trust in the name of
the Medicaid recipient. Rather than pay their surplus income to Medicaid,
recipients may pay the surplus income into the established pooled income trust
and those funds may then be used to pay many of the recipient's expenses.
MEDICAID ASSETS (RESOURCES) STANDARDS
In order to be eligible for Medicaid benefits, an individual may
not have assets worth more than approximately $13,000.00. For couples,
the assets standard is approximately $19,000.00. There are two important
exceptions to this rule. The applicant's primary residence, up to a value
of $750,000.00, will not be counted toward an applicant's resources by
Medicaid. Also, money held in an IRA or other retirement account will not
be considered a resource by Medicaid if the account is in a "pay"
status, i.e. the applicant is over the age of 70 ½.
LOOK-BACK PERIOD AND PERMISSIBLE TRANSFERS
When applying for Medicaid benefits, Medicaid will examine the
applicant's assets to determine if any assets were transferred away, prior to
applying for Medicaid, in order to qualify the applicant for Medicaid
benefits. The look-back period is 60 months prior to the submission of
the application. It is important to note that the transfer rules only
apply to applicants for nursing home Medicaid benefits --- they do not apply to
those applying for community based home care benefits. As such, it is
possible for an applicant to transfer assets and become immediately available
for Medicaid home care benefits.
When applying for nursing home or institutional Medicaid benefits,
an applicant's home may be permissibly transferred to a spouse, a child who is
under age 21, blind or disabled, a sibling who has an equity interest in the
home and who was residing in the home for at least one year before the
applicant was institutionalized, or to a child age 21 or older who was residing
in the home for two years prior to the applicant being institutionalized.
The transfer of assets, other than the home, are permissible to a
spouse, a certified blind or disabled child, or, for applicants under age 65,
to a trust that meets certain specified requirements.
In certain circumstances, assets may be transferred into a
Medicaid annuity and thus qualify the applicant to receive Medicaid benefits.
Subject to certain rules and regulations, Medicaid may seek
recovery of some of the benefits paid from the estate of a Medicaid
recipient. Recovery may only be had against the estate of the recipient
and, as such, against assets included in that estate. Any recipient
assets that do not pass through the estate but rather pursuant to will
substitutes are immune from an estate recovery. This lien on the estate
of the recipient does not come into existence until after the recipient's
death.
Under certain circumstances, Medicaid may place a lien on the home
of an individual receiving institutional Medicaid benefits during the lifetime
of that recipient when there is no reasonable expectation that the recipient
will be returning home.
Proper Medicaid planning can help mitigate the affect of Medicaid
liens.
