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Paying for Nursing Home Care with Medicaid
By Jim Miller
The
rules and requirements for Medicaid eligibility for nursing home
care are somewhat complicated and will vary according to the state
you live in. With that said, here’s a general, simplified rundown
of what it takes to qualify, along with some resources you can turn
to for help.
Medicaid Rules
Medicaid, the federal and state joint program that covers health care for the
poor, is also the largest single payer of America’s nursing home bills
for seniors who don’t have the resources to pay for their own care.
Most people who enter nursing homes don’t qualify for Medicaid at first,
but pay for care either through long-term care insurance or out-of-pocket until
they deplete their savings and become eligible for Medicaid.
To qualify for Medicaid, your income and assets will need to be under a certain
level that’s determined by your state. Most states require that a person
have no more than about $2,000 in countable assets that includes cash, savings,
investments or other financial resources that can be turned into cash.
Assets that aren’t counted for eligibility include your home if it’s
valued under $525,000 (this limit is higher – up to $786,000 – in
some states), your personal possessions and household goods, one vehicle, prepaid
funeral plans and a small amount of life insurance.
But be aware that while your home is not considered a countable asset to determine
your eligibility, if you can’t return to your home, Medicaid can go after
the proceeds of your house to help reimburse your nursing home costs, unless
your spouse or other dependent relative lives there. (There are some other exceptions
to this rule.)
After qualifying, all sources of your income such as Social Security and pension
checks must be turned over to Medicaid to pay for your care, except for a small
personal needs allowance – usually between $30 and $90.
You also need to be aware that you can’t give away your assets to qualify
for Medicaid faster. Medicaid officials will look at your financial records going
back five years to root out suspicious asset transfers. If they find one, your
Medicaid coverage will be delayed a certain length of time, according to a formula
that divides the transfer amount by the average monthly cost of nursing home
care in your state.
So if, for example, you live in a state where the average monthly nursing home
cost is $5,000 and you gave away cash or other assets worth $100,000, you would
be ineligible for benefits for 20 months ($100,000 divided by $5,000 = 20).
Spousal Protection
Medicaid also has special rules for married couples when one spouse enters a
nursing home and the other spouse remains at home. In these cases, the healthy
spouse can keep one half of the couple’s assets up to $113,640 (this amount
varies by state), the family home, all the furniture and household goods and
one automobile. The healthy spouse is also entitled to keep a portion of the
couple’s monthly income – between $1,838 and $2,841. Any income above
that goes toward the cost of the nursing home recipient’s care.
What about Medicare?
Medicare, the federal health insurance program for seniors 65 and older and some
younger people with disabilities, does not pay for long-term care. It only helps
pay up to 100 days of “rehabilitative” nursing home care, which must
occur after a hospital stay.
Get Help
Again, Medicaid rules are complicated and vary by state, so contact the local
Medicaid office (call 800-633-4227 for contact information) for eligibility details.
You can also get help from your State Health Insurance Assistance Program (SHIP),
which provides free counseling on all Medicare and Medicaid issues. To find a
local SHIP counselor visit shiptalk.org, or call 800-677-1116.
This page and its contents ©2012
Metropolitan News Company, Inc.
