Important Elder Law Issue: Do I Qualify for Medicaid?
"My dad is moving into a skilled nursing facility. How are he and mom going to pay for this?" We have heard this question and variations of it time and again. With the average cost of nursing home care around $8,800.00 per month, many individuals who need around the clock skilled care have no clue how to pay for it.
You may have heard about Medicaid or, as it is called in Pennsylvania, Medical Assistance. Medical Assistance is a government welfare program, which can help people pay for long-term skilled care. Each state sets its own eligibility requirements for Medicaid. If you meet those requirements, you may be able to get funds to help you pay for long-term care. So what are those requirements?
U.S. Citizenship Required: Only U.S. citizens and certain legal, qualified alien residents can qualify for the program; and Pennsylvania Residency Required: Only applicants who live in Pennsylvania can qualify for its publicly funded and run programs; Age or disability: To qualify for coverage, a person must be age sixty-five or older. Currently, for younger applicants, only those who are blind, disabled, the parent of a disabled child or who receive Supplemental Security Income (SSI) from the federal government are eligible. For purposes of Medical Assistance, "disabled" is defined by federal law.
Furthermore, there are Income and Resource Limits: If a patient has too much money, they are not eligible. The Department of Public Welfare looks at what the applicant gets every month (income) as well as the assets available to them (resources). As of January 2014, if a person receives income of more than $2,163.00 per month, they can only have $2,400.00 in resources. If they get less than $2,163.00 per month, then they can have $8,000.00 in resources. Income includes virtually all cash coming into your pocket. This means that Social Security payments, dividends, interest, and payments from annuities to name a few, these all count towards your monthly income. What do you have to live on each month? That is your income. Resources include all property owned by the applicant and their spouse, which could potentially be used to pay for nursing home care. Understandably, the government wants to discourage those who are financially able to pay from relying on public programs. Revocable trusts, joint bank accounts, CDs, retirement accounts, investment accounts, certain life insurance policies - all can be cashed out and used to pay for nursing home care. If the total amount of those means exceeds the limits explained above, an individual cannot qualify.
Be careful because there is a Gifting Penalty: You can't just give your resources away. If you have a CD worth $20,000 and you transfer it over to your son, thinking that will help you qualify for Medicaid, you will have done far more harm than good. If an applicant transfers their property to another person for less than fair market value (i.e.: makes a gift), they will be penalized and ineligible for Medical Assistance for a certain period of time. The only exception is if the transfer was made more than five years before the giver applied for Medicaid. This time period is often called the "look back period", because the government will 'look back' five years from the date the application was submitted to see what has been given away. The law does permit you to make certain gifts without a penalty, however it takes an attorney skilled in Medicaid law to know what transfers are appropriate and which will disqualify you.
Not to worry because there is Exempt Income and Exempt Resources: In most cases, all of a person's income is counted. In a few limited cases though, certain portions are not counted. The excluded amounts include certain wartime reparation payments, veterans' benefits and tax refund payments. Again, the rules are highly technical and it takes a lawyer well-versed in the laws to know what counts and what doesn't.
A few of your resources will not be counted when you apply for Medical Assistance. Your primary residence, one car, certain life insurance policies, household goods and burial funds. The rules are strict when it comes to exemptions, so be sure to consult a lawyer about what resources you have.
As you can see, the Medicaid rules are very, very complex. If you think you need help paying for long-term care, always talk to a skilled attorney first. Do you have questions about your or a loved one's eligibility for Medical Assistance? Call our office at 724-940-0100 to speak with one of our knowledgeable elder law attorneys today.