Editor’s Note: This is a guest post provided by Fay Wein, Senior Planning Services, a company that assists seniors with Medicaid eligibility issues. More information at http://www.senior-planning.com/.
Medicaid is a joint federal and state-sponsored program that pays for individuals requiring long-term care residing at home, in an assisted living/ senior community or nursing home. Many different criteria are taken into account as to eligibility.
The Department of Health and Senior Services will first determine an applicant’s medical eligibility, followed by the County Board of Social Services reviewing the financial status and eligibility of the individual.
Medical eligibility: As far as the medical eligibility is concerned, generally speaking, a number of forms will need to fill out by the applicants’ physician and the family of the senior. In some cases, a nurse representative from the Department of Health will come down to do some clinical assessments of the applicant.
Financial eligibility: As to financial eligibility, an applicant needs to be under a predetermined income and asset threshold, depending on the state of residence. Another area of consideration is whether the applicant has a spouse living at home, also referred to as a “community spouse” or if the spouse resides at a nursing home. If the spouse lives at home, they may keep certain assets, like the primary residence and in certain scenarios some monthly income.
Some exceptions: Another factor that could help your eligibility is setting up a fund for the care of a disabled child. Also, in many cases primary residence can be kept by an adult child of the applicant. If the adult child provided full-time in-home care for at least two years that prevented the parent from being admitted to a nursing home sooner, Medicaid will generally allow them to keep the primary residence. Also, Medicaid pays for a very basic funeral service and many opt for a more desirable funeral which will not be covered by Medicaid. If a prepaid funeral were to be set up as an irrevocable trust fund, then those funds would not be counted towards Medicaid eligibility, either.
Things to be aware of: Medicaid will “look back” for a period of five years prior to Medicaid eligability date. They will require all bank statements and the like covering this period. Any monetary gifts that were granted during this 60-month period will generally bring about a penalty by Medicaid. Medicaid will not cover the long-term care of the applicant corresponding to the amount of the gifts granted. This penalty period is calculated based on the average cost of nursing care. Many people mistakenly assume that they can gift up to $13,000 annually as this is the amount permitted for IRS purposes. This is not the case for Medicaid and therefore proper planning is called for.
Conclusion: When long-term care is on the horizon, it is important to educate yourself on the many Medicaid rules and regulations or speak to a Medicaid eligibility consultant. The key to Medicaid eligibility is plan, plan, and plan. As Alan Lakein famously said; “People don’t plan to fail; they fail to plan”.