Dear Savvy Senior,
If my mother has to move into a nursing home, what are the eligibility requirements for Medicaid to cover the costs?
Caring son
Dear Caretaking,
The rules and requirements for Medicaid eligibility for nursing home care are complicated and vary depending on the state your mother lives in. With that in mind, here is a general, simplified overview of eligibility requirements.
Medicaid eligibility
Medicaid, the joint federal-state program that covers health care for the poor, is also the largest single payer of American nursing home bills for seniors who don’t have the means to pay for their own care. (Note that some states call their Medicaid program something different.)
Most people who enter a nursing home are not initially eligible for Medicaid, but pay for care either through long-term care insurance or out of pocket until their savings run out and they become eligible for Medicaid.
To qualify for Medicaid, your mother’s income and assets must be below a certain amount set by your state. In most states (except California), single individuals cannot have more than $2,000 in qualifying assets ($3,000 for married couples), including cash, savings, investments, or other financial resources that can be converted to cash.
Assets that are not considered for eligibility include your mother’s home if its value is less than $713,000 (in some states, this limit is higher and can be as high as $1,071,000), her personal belongings and household goods, a vehicle, prepaid funeral plans, and a small life insurance policy.
Note, however, that while her home is not considered an eligible asset for purposes of determining eligibility, if she cannot return home, Medicaid can use the proceeds from her home to reimburse her nursing home costs unless a spouse or other dependent relative lives there. (There are a few other exceptions to this rule.)
Once qualified, all of your mother’s sources of income, such as Social Security and pension checks, must be turned over to Medicaid to pay for her care, except for a small allowance for personal needs – usually between $30 and $160.
You also need to be aware that your mother cannot give away her assets to become eligible for Medicaid faster. Medicaid officials will review her financial records for the past five years (except in California, which has a 30-month look-back rule) to detect any suspicious asset transfers. If they find one, her Medicaid coverage will be delayed for a certain amount of time, according to a formula that divides the transfer amount by the average monthly cost of nursing home care in her state.
For example, if your mother lives in a state where the average monthly cost of a nursing home is $8,000 and she gave away $160,000 worth of cash or other assets, she would be ineligible for benefits for 20 months ($160,000 divided by $8,000 = 20).
Spouse protection
Medicaid also has special provisions (known as the Community Spouse Resource Allowance) for married couples when one spouse goes into a nursing home and the other stays at home. In these cases, the healthy spouse can keep half of the couple’s assets up to $154,140 (this amount varies by state), the family home, all furniture and household items, and a car. The healthy spouse is also entitled to a portion of the couple’s monthly income – between $2,465 and $3,854. Any income above that amount goes toward the cost of the nursing home recipient’s care.
What about Medicare?
Medicare, the government health insurance program for seniors age 65 and older and some younger people with disabilities, does not cover long-term care. It only covers the cost of up to 100 days of rehabilitative care in a nursing home after a three-day hospital stay.
For more information, contact your state Medicaid office. You may also be able to get help from your state health insurance assistance program (see ShipHelp.org), which offers free counseling on Medicare and Medicaid issues.
Send your questions to: Savvy Senior, PO Box 5443, Norman, OK 73070, or visit SavvySenior.org. Jim Miller is an employee of NBC Today Show and author of “The experienced senior” Book.
