Question: What are the financial requirements for being approved for Medicaid’s Long Term Care Benefits?
Answer #1: Although Medicaid, also known Title 19, is a Federal benefit program, it is administered by the States, and as such it is very state-specific. This answer is only applicable to residents of Connecticut.
In Connecticut there are two different sets of requirements for Medicaid Long Term Care benefits; one for married people, and one for single people. We will first look at a married couple.
In this scenario we have one spouse who is in a long term skilled facility (convalescent home, nursing home). Except for very limited pilot programs, Medicaid does not cover Assisted Living Facilities. We will call her the Institutionalized spouse. The other spouse is called the Community spouse.
The first issue most people need to deal with is that regardless of the name on the account, between married couples, any money that is in either name, or both names is in one pot for either to use. This means that one spouse can’t give all of her/his assets to the other spouse and say that they are destitute.
That being said, for an institutional spouse to receive benefits, that individual can have no more than $1,600 in assets in their own name, no vehicles, life insurance with a cash value not to exceed $1,500, and a pre-paid irrevocable funeral contract not to exceed $5,400. They can also have a small pre-paid revocable funeral contract. In addition, generally all of the “applied income” of the institutional spouse, which would include Social Security, Railroad retirement, any pensions, royalties, etc. goes to the facility. The institutional spouse is allowed to keep $60. from the applied income for personal items such as haircuts, etc.
The Community Spouse is allowed to keep one home with equity of no more than $814,000., one car, pre-paid funeral contracts as above, and one-half of the remaining assets not to exceed $117,240. What does this mean? It means if a couple has 1 Million dollars in either or both names, the Community spouse can keep $117,240. and if the couple has $100,000 in either or both names, the Community spouse can keep $50,000. There is also a minimum amount that the Community spouse can keep of $23,499 regardless of the total.
For a single individual who is in, or going into, a long term skilled facility he or she can keep the same $1,600, the same pre-paid funeral contracts, and the same amount in cash value of life insurance ($1,500.). They can’t have a car, a home of any value, or any other assets including cash. As before, all of their income, less $60. goes to the long term care facility.
George P. Guertin, Esq.
Senior Partner, Guertin and Guertin, LLC
North Haven, Connecticut
Answer #2: Generally, there are asset requirements such as some states called “SSI” states say that the Medicaid applicant can keep up to $2,000 and exempt property such as the home and a car, wedding rings, funeral trusts, burial plots, and a small burial expense fund to cover incidentals such as Thank you cards, postage and things of that nature. Other states called “209(b) states” only let the Medicaid applicant keep up to $1,500 plus exempt property. There are also limits for what the spouse not in a nursing home can have. Sometimes it becomes necessary to convert non-exempt property into exempt property. Such an example would be taking cash and buying things for fair market value such as fixing up a house (new roof, new carpet, new cabinets for the home that is usually exempt You might spend cash to fix up the Medicaid applicant’s car, even though, they may never drive it again.
There are also income rules that vary from state to state. Some states don’t care how much you make because all of the Medicaid Applicant’s cash (Social Security, VA Pension, other pensions and income from stock, bonds, royalties) goes to the nursing home. In those states, the Medicaid rules have the state pay the difference between the actual cost of the nursing home less what already has been paid by the Medicaid Applicant. Of course, if your income is so great you may not need Medicaid at all. There are other states that are called “income gap states”. Those states say that if you are receiving more income than the state allows that you have to set up a Miller Trust otherwise known as a Qualified Income Trust the money that goes through a Miller Trust is considered “unavailable” to the Medicaid Applicant and it will then say that that income going through the trust is “unavailable” to the Medicaid Applicant. The now “unavailable” income goes to the nursing home (some may be diverted to the spouse, if the spouse does receive enough income on their own) and Medicaid again pays the difference between the actual cost of the nursing home less what the Medicaid Applicant has already paid each month. The more money each month that the Medicaid Applicant receives, then the less that Medicaid has to pay. And conversely, the less money that the Medicaid Applicant pays, then the more that Medicaid pays each month to the nursing home.
Attorney I. Michael Tucker
Altamonte Springs, Florida