When Does Medicaid Help Fund Care in Assisted Living or Skilled Nursing?
This Medicaid eligibility question often arises at that point when a person, or his or her adult children, are facing the choices of home care or the full-service of an assisted living community or even skilled nursing centers. Regardless of the family’s financial situation, it is rare that we don’t deal with this question and the fear that underlies it: can we afford this and what happens if or when we run out of money?
Let’s Look at Basic Facts of Medicaid Eligibility
To qualify for Medicaid, an individual must meet three requirements.
If the applicant is over income but otherwise qualified, Medicaid eligibility can be met by creating a qualified income trust which must be funded and maintained during every month benefits are received.
To make a Medicaid application the applicant must be in a Medicaid approved facility or have a move in date. One cannot prequalify for benefits.
What assets are counted?
For Medicaid purposes, not all assets count toward the applicant and the spousal limit. The most important excluded asset in Florida is the homestead property but this is not the same in every state. In addition to the home, under current law, other excluded property includes rental or income producing property, jointly held property, certain IRA’s (if monthly distributions are taken), prepaid burial plans, and personal property, including one car of any value.
All checking accounts, CDs, 401K accounts, and other cash investments are counted, as well as cash value in life insurance policies and accounts jointly held with another individual.
Can I transfer money to qualify?
Usually no, but there are some exceptions. An applicant can transfer assets to a spouse, to an adult disabled child or a minor child, or to a pooled trust. Other transfers create a penalty. The penalty is determined by dividing the amount transferred by $8346.00 which then equals the number of months of ineligibility for Medicaid. The penalty does not begin however until an application for benefits is made and the applicant is eligible except for the transfer. Transfer made within 5 years of an application must be reported.
What happens to my income?
All gross income of the applicant, less $105.00 must go toward the cost of care. If there is a spouse he or she is allowed to keep all of their income and in some cases income from the applicant can be shifted to the spouse if they need more income to cover monthly expenses.
These are difficult questions to grapple with even in the simplest family situations. Most families face unique circumstances and would be well-advised to consult with an elder law attorney for long term care planning sooner rather than later. That’s why I am here.
What happens to my home?
Your home is a protected asset, with no limit as to value as long as you, your spouse, a minor child, or disabled adult child resides in the home. If you are single, the equity cap is $552,000. However, as an exempt asset, your home is also exempt from creditors at your death, even if on Medicaid, as long as it passes to your “heirs at law.”
You may still have questions which I can help you answer. We can over those in an initial consultation session.