Are you applying for Medicaid?
There are three types of Medicaid: (1) Community Based (2) Custodial Long-Term Care and (3) Waiver Programs. Most likely, you are interested in information about Custodial Long-Term Care or the Waiver Programs offered in the applicant's home state.
Medicaid is a public benefits program. The rules are very complicated, and for you or your loved one, there is a lot at stake. The costs of long-term custodial care are going nowhere but up, quickly approaching $100,000 per year. There are only three ways to pay for long-term custodial care: (1) private pay (2) long-term care insurance; or (3) Medicaid. If you are in a crisis situation, it is recommended that you consult with an Elder Law attorney familiar with Medicaid eligibility rules before you apply for Medicaid.
The Medicaid Program
Medicaid is a welfare program jointly administered by the federal government and the states. Each of the states administers the program subject to their own state agencies and Medicaid Manuals. An applicant has to satisfy two eligibility criteria: first, the applicant must be aged (over 65) or disabled, and second, the applicant must have less than $2,000 in countable recourses ($2,500 in Maryland and $4,000 in D.C.). If determined eligible for custodial long-term care, Medicaid will pay the nursing care facility the costs for custodial long-term care of the eligible individual. In addition, Medicaid will pay the facility, or a third-party provider, for the cost for ancillary services provided to the individual.
Medicaid Waiver is a Medicaid benefits program offered to qualified applicants as an alternative to long-term custodial care in a nursing home. The eligibility criteria are essentially the same as those of long-term custodial care, with some variation by jurisdiction.
The Waiver Program allows an eligible individual to continue to reside at home, with support services provided and paid for by Medicaid. The concept of the Waiver Program is to allow an eligible individual to stay at home, rather than enter a custodial care nursing home if the costs to Medicaid are less than the costs of custodial long-term care. There are a variety of Waiver Programs such as Home and Community Based, Mental Retardation and Consumer Directed. The Waiver Program has specific rules of eligibility and implementation. It is best to consult with an Elder Law attorney if you are considering the Waiver Program.
Medical eligibility for long-term care is determined on a case-by-case basis. Covered groups are the aged (over 65), blind, and/or disabled. In most jurisdictions, the aged applicant must also be deficient in a number of activities of daily living (transferring from bed to chair, dressing, toileting, eating, etc.) and require skilled nursing care. If your loved one is at home, the county social services office will do an assessment for eligibility. If they are in a nursing home, the facility will conduct the assessment.
Medicaid's financial eligibility rules were designed with the married couple in mind. The individual in (or applying for) long-term custodial care is identified as the "institutionalized spouse (IS)" and the spouse at home is the "community spouse (CS)." All of their resources, regardless of whose name is on the title, are counted for purposes of Medicaid eligibility. This includes resources titled jointly with any third-party, including children.
Once all resources are identified, they are divided into two groups: countable assets and exempt assets. Exempt assets include the marital home, provided the CS is living in it, personal property, pre-paid funeral and burial, and automobile. All resources that are not exempt assets are countable. The value of each countable asset is fixed by Medicaid as of the first day of the first month of the admission of the IS into a medical facility that lasts more than thirty consecutive days.
Community Spouse Resource Allowance
The CS is allowed to keep one-half (50%) of a married couple's countable resources to a maximum of $119,220 (2015). The minimum is $23,844 (2014). For example, in Virginia, if a married couple has $234,480 in countable assets, the CS can keep the maximum of $119,220 and the IS can keep $2,000. Thus the couple is over-resourced by $113,260.
Income is treated differently for Medicaid eligibility purposes. Medicaid follows the "name on the check rule"; that is, there is no mingling of income between spouses. The general rule, subject to variations among jurisdictions, is that if the applicant's income is less than the private pay rate of the nursing home and he/she is resource qualified, then he/she is financially qualified.
Medicaid eligibility rules provide for a shifting of income from the IS to the CS to assure that the CS has a base income. The maximum base income guaranteed the CS is $2,980 (2015). The minimum guaranteed amount, known as the Minimum Monthly Maintenance Needs Allowance (MMMNA), is $1,991.25 (2015).
The Application Process
Each jurisdiction has its own application process and specific requirements for documentation. See your state's Medicaid Web site to find out more about local procedures. The first step is to obtain and review a copy of the application of the jurisdiction where your loved one is in a long-term care facility, or his/her residence if he/she is going into a long-term care facility in the jurisdiction where he/ she lives. Eligibility rules are different for each jurisdiction, and eligibility strategies, resource preservation, planning, and documentation will vary from jurisdiction to jurisdiction, so it is very important to identify the correct jurisdiction. You should contact an Elder Law attorney prior to attempting to navigate the application process.
Lastly, please familiarize yourself with the Medicaid Myths to avoid any misinformation.