Nursing Home Care – Medicaid Eligibility Guidelines

Nursing Home Care – Medicaid Eligibility Guidelines:  Important to know because long term nursing home care is expensive, and not covered by most traditional health insurance, unless the policy is written specifically for long term care.  Individuals of moderate wealth and lower incomes need to be familiar with eligibility requirements for Medicaid, which, if qualified, will cover virtually all nursing home care expenses.

Non-Income or asset based requirements:  The receipent must be a U.S. citizen or a “qualified immigrant”,  be 65 years or older, or bilind or disabled (as defined by SSDI).

Income and asset eligibility requirements:  A recepient is allowed $2000 or less in cash or assets. 

Exceptions:

  1. Whole life insurance with face value less than $1500
  2. Term life insurance with no face value
  3. Employer provided group insurance policy
  4. Burial contract funded by life insurance policy, irrevocably assigned to a funeral home
  5. Up to $5,367.oo pre-paid burial plan
  6. Cemetery plots, headstones, markers, plaques, caskets
  7. Annuities providing regular and periodic payments over the annuitant’s life, and which are actuarially sound

Transfers of Assets – transfers are considered to be any act which changes the way any asset is held, including adding a name to a deed, opening a bank account, creating a trust, or giving property away as a gift, or for less than market value.

Allowed Transfers:

  1. $109,560 in cash can be transferred to community spouse (spouse residing in community) This amount is changed from year to year.
  2. The marital home may be transferred to the community spouse, as long as the community spouse resides in the house
  3. The recipient’s home may be transferred to an adult child who is a caregiver
  4. The recipient’s home may be transferred to a sibling who is a joint tenant, as long as the joint tenancy was established more than 36 months prior to application or admission to the nursing home.
  5. Any asset which is transferred more than 36 months prior to application for Medicaid, or admission to nursing home, is allowed.
  6. Any asset which is transferred to a revocable trust more than 60 months prior to application for Medicaid, or admission to a nursing home, is allowed.
  7. Transfers to an irrevocable trust made more than 36 months prior to application, or admission to a nursing home, are allowed.

Effect of Non-Allowed Transfers:

Transferring assets for less than fair market value less than 36 months prior to application (or 60 months in the event of a transfer to a revocable trust), will result in disqualification for Medicaid benefits for a period of time.  The period of disqualification is determined by  dividing the uncompensated value of the transferred asset by the monthly private pay rate of the nursing.

There are options available which will enable an individual of moderate wealth to qualify for Medicaid benefits, but these options require planning and consultation with an experienced trust attorney.

Cherub

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