WHAT MEDICAID COVERS
Medicaid is a joint federal and state program that provide medical and long-term care for those with limited assets. It is available to certain individuals who are under age 65 and to seniors who have Medicare coverage. Medicaid will provide coverage for services not otherwise covered by Medicare. Medicaid provides a broad range of services which includes:
- Hospital and nursing home care
- Physician services
- Home care
- Dental services
- Vision services
- Prescription drugs
- Hospice care
MEDICAID INCOME STANDARDS
The amount of income that a Medicaid recipient is permitted to have depends upon whether the recipient is living at home and receiving home care or is in a nursing home. A recipient living at home is considered to be living in the community. The income standard for community Medicaid recipients is approximately $700.00 per month for an individual and $1,000.00 per month for a couple. However, if a recipient is living in a nursing facility, she is only permitted an income, with certain exceptions, of $50.00 per month. Income in excess of these amounts is considered surplus income. Surplus income does not, in and of itself, prevent the receipt of Medicaid benefits; however, monthly surplus income must be paid by the Medicaid recipient in order to receive Medicaid benefits.
Those individuals receiving community home care Medicaid benefits can take steps to protect their surplus income. In many instances, Medicaid will permit the establishment of a pooled income trust in the name of the Medicaid recipient. Rather than pay their surplus income to Medicaid, recipients may pay the surplus income into the established pooled income trust and those funds may then be used to pay many of the recipient's expenses.
MEDICAID ASSETS (RESOURCES) STANDARDS
In order to be eligible for Medicaid benefits, an individual may not have assets worth more than approximately $13,000.00. For couples, the assets standard is approximately $19,000.00. There are two important exceptions to this rule. The applicant's primary residence, up to a value of $750,000.00, will not be counted toward an applicant's resources by Medicaid. Also, money held in an IRA or other retirement account will not be considered a resource by Medicaid if the account is in a "pay" status, i.e. the applicant is over the age of 70 ½.
LOOK-BACK PERIOD AND PERMISSIBLE TRANSFERS
When applying for Medicaid benefits, Medicaid will examine the applicant's assets to determine if any assets were transferred away, prior to applying for Medicaid, in order to qualify the applicant for Medicaid benefits. The look-back period is 60 months prior to the submission of the application. It is important to note that the transfer rules only apply to applicants for nursing home Medicaid benefits --- they do not apply to those applying for community based home care benefits. As such, it is possible for an applicant to transfer assets and become immediately available for Medicaid home care benefits.
When applying for nursing home or institutional Medicaid benefits, an applicant's home may be permissibly transferred to a spouse, a child who is under age 21, blind or disabled, a sibling who has an equity interest in the home and who was residing in the home for at least one year before the applicant was institutionalized, or to a child age 21 or older who was residing in the home for two years prior to the applicant being institutionalized.
The transfer of assets, other than the home, are permissible to a spouse, a certified blind or disabled child, or, for applicants under age 65, to a trust that meets certain specified requirements.
In certain circumstances, assets may be transferred into a Medicaid annuity and thus qualify the applicant to receive Medicaid benefits.
Subject to certain rules and regulations, Medicaid may seek recovery of some of the benefits paid from the estate of a Medicaid recipient. Recovery may only be had against the estate of the recipient and, as such, against assets included in that estate. Any recipient assets that do not pass through the estate but rather pursuant to will substitutes are immune from an estate recovery. This lien on the estate of the recipient does not come into existence until after the recipient's death.
Under certain circumstances, Medicaid may place a lien on the home of an individual receiving institutional Medicaid benefits during the lifetime of that recipient when there is no reasonable expectation that the recipient will be returning home.
Proper Medicaid planning can help mitigate the affect of Medicaid liens.
MEDICAID RETROACTIVE BENEFITS
Medicaid coverage will generally begin on the first day of the month following the date of application. However, under certain circumstances, an applicant may request and receive a retroactive authorization for medical expenses incurred during the three months prior to the application.