The Basic Rules of Medicaid Eligibility
Know who can qualify for nursing home coverage
Lacking access to alternatives like long-term care insurance or Medicare, most people pay out of their own pockets for long-term care until they become eligible for Medicaid.
Since few people have long-term care insurance or can afford to pay the high cost of nursing home care out-of-pocket, most people eventually qualify for Medicaid. By default, it has become the primary source of funding for nursing home care and the long-term care insurance of the middle class. Read More
Although their names are confusingly alike, Medicaid and Medicare are quite different programs. Medicare is an “entitlement” program, meaning that everyone who reaches age 65 and is entitled to receive Social Security benefits also receives Medicare. Medicaid, on the other hand, is a form of welfare – or at least that’s how it began. To be eligible for Medicaid, you must become “impoverished” under the program’s guidelines. Also, unlike Medicare, which is totally federal, Medicaid is a joint federal-state program. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive federal money, which pays for about half the state’s Medicaid costs. (The state picks up the rest of the tab.)
This complicates matters, since the Medicaid eligibility rules are somewhat different from state to state, and they keep changing. (The states also sometimes have their own names for the program, such as “Medi-Cal” in California and “MassHealth” in Massachusetts.)
Both the federal government and most state governments seem to be continually tinkering with the eligibility requirements and restrictions.
Congress does not want you to move into a nursing home on Monday, give all your money away on Tuesday, and qualify for Medicaid on Wednesday.
This most recently occurred with the passage of the Deficit Reduction Act of 2005 (the “DRA”), which was enacted on February 8, 2006, and significantly changed the rules governing the treatment of asset transfers and homes of nursing home residents. The implementation of these differs from state to state. To be certain of your rights in your particular state, consult an elder law attorney. Read More
He or she can guide you through the complicated rules of the different programs and help you plan ahead. It is also worth noting that, spurred by incentives from the federal government, state programs are spreading that are aimed at keeping Medicaid long-term care recipients in the community and out of nursing homes for as long as possible.
Qualifying for Medicaid
While two-thirds of nursing home residents are covered by Medicaid, at root it is a health care program for the poor. The definition of “poor” has become quite complex in the area of nursing home coverage. In order to be eligible for Medicaid benefits, a nursing home resident may have no more than $2,000 (in most states) in “countable” assets. The spouse of the nursing home resident – called the “community spouse” – is limited to one half of the couple’s joint assets up to $120,900 (in 2017) in countable assets.
(In some states the community spouse may keep all of the couple’s assets up to $120,900, not just half up to that amount.) This figure, called the community spouse resource allowance (CSRA), changes each year to reflect inflation. In addition, the community spouse may keep the first $24,180 (in 2017), even if that is more than half of the couple’s assets. This figure is higher in some states, up to the full $120,900 as mentioned above.
All assets are counted against these limits unless the property falls within the short list of “noncountable” assets. These include:
- Personal possessions, such as clothing, furniture, and jewelry. One motor vehicle of any value as long as it is used for transportation.
- The applicant’s principal residence, provided it is in the same state in which the individual is applying for coverage. In most states, the home has not been considered a... Read More
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