Medicaid, or Medical Assistance (as it is known in PA) is available to middle class families to help pay for long-term care. Discover basic facts about Medicaid regulations and the Medicaid process with this guide.
What is the difference between Medicare and Medicaid?
Medicare is health insurance and covers medical services such as physician appointments, therapy, blood tests, x rays, medical procedures and hospitalization. Medicare will sometime pay for rehabilitation in a long-term care facility for a period of 20 to 100 days, but not longer. In long-term care, Medicaid covers the cost of ongoing support services for daily functioning, such as room and board in a nursing home.
When is an individual eligible to receive Medicaid?
For Medicaid to pay for care in a nursing home, an individual recipient must be determined to need a nursing home level of care by a physician and the local Office of Aging. An individual whose income is not greater than three times the poverty level may keep up to $8,000 of total resources, but may otherwise keep only $2,400. The cash value of life insurance counts as a resource, but one car and a residential home does not count as a resource.
Are eligibility rules different for an individual who is married?
The criteria are the same for the applicant for Medicaid. However, excess resources may be transferred to a spouse, who is usually entitled to keep 50% of resources up to a maximum amount ($126, 420 in 2019). There is no maximum on a spouse’s income. An attorney who is experienced with Medicaid rules pertaining to long-term care can help to protect excess resources by converting them into allowable income for the spouse.
Are assets owned individually or jointly between a spouse and a nursing home resident considered?
Yes, all of these types of assets are included when calculating eligibility. One exception is an IRA which is owned by a spouse living in the community. Prenuptial agreements do not help to protect additional resources.
What is the “look-back period, and how is it related to “gifting”?
The Department of Human Services will review an individual’s financial information for the 60 months (5 years) preceding the date of a Medicaid application. They are looking for transfers of assets in an amount of $500 or more in any one month to another person or trust without payment of just compensation, such as for providing services per terms of a written contract. Uncompensated transfers are known as “gifts.” Gifts are not illegal in the sense of causing a criminal charge against the Medicaid applicant or gift recipient, but they do create a significant penalty which may cause personal liability for the applicant’s children.
When should a family begin thinking about applying for Medicaid?
If a nursing home resident is not a millionaire, then a family should begin consideration of Medicaid immediately.
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