Long Term Care Funding Through Medicaid

Medicaid is a federal-state program of medical assistance for individuals who are aged, blind or disabled. There are a number of different Medicaid programs. Medicaid’s Institutional Care Program (ICP) covers most of the costs of long term care (LTC) in a nursing home. In addition, it may pay for some home care or assisted living.

For many middle class senior citizens, Medicaid is used to pay the costs of LTC without spending down all their assets. The following information is helpful general information about Medicaid program requirements, however it should not be a substitute for legal advice:

MEDICAID REQUIREMENTS

Asset Requirements:

An applicant can have no more than $2,000 in countable resources. It is necessary for all resources to be disclosed to Medicaid. However, it is important to note that not all assets are countable and it is possible to convert some countable resources into non-countable resources.

Exempt assets: Home up to $500,000 equity, $2,500 burial account, $2,500 life insurance, prepaid burial and funeral, furnishings, car.

Community Spouse Resource Allowance: The community spouse is entitled to keep some of the couple’s pooled countable resources. For 2009, there is a maximum of $109,560.

Transfer of assets: Gifts or transfers of assets within 3 to 5 years may be considered in determining eligibility and create a penalty period for eligibility. Failing to report transfers or asset information is considered Medicaid fraud.

Income Requirements:

The individual must meet the income test for SSI eligibility to be entitled to Medicaid. In 2009 the income cap is $2022 per month for the applicant. However, too much income is almost never a barrier for Medicaid qualification. It is possible to draft a trust which would resolve the excess income obstacle.

Medicaid planning usually consists of converting countable resources into non-countable resources. This planning should be done with an elder law attorney as there are significant consequences to these planning methods if not done properly.

How You Qualify for VA Benefits May Have a Negative Impact on Your Qualification for Medicaid Benefits

My clients hear it time & time again from VA Agencies: "you don't need an attorney to qualify for VA Aid & Attendance benefits; someone from our office can help you complete the application." My response is yes, they will help you complete the application, however they will not provide you with any guidance on what action you need to take in order to qualify for these benefits. On the other hand, an elder law attorney not only advocates to qualify you for VA Benefits; most attorneys will be vigilant that the planning used to qualify you for VA Benefits does not disqualify you from Medicaid, if you should need it in the future.

It's common for third parties to suggest gifting your money to adult children in order to meet VA asset limitations. Unfortunately, if within the next five years the veteran should require additional services in the assisted living facility or long-term custodial care in a nursing home, he or she discovers that THE RULES FOR OBTAINING MEDICAID BENEFITS ARE VERY DIFFERENT FROM THE RULES FOR OBTAINING VA BENEFITS. It is wise to consult with an elder law attorney to avoid making decisions that may be detrimental to you and your family.