Using Medicaid to Pay for Senior and Long Term Care

Definition	Qualifications	Costs
Pros & Cons	Benefit Types & Limits	How to Apply
Overview of Medicaid

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Medicaid is very confusing. Keep in mind the following when reading this webpage.

• Medicaid has different names in different states (e.g. Medi-Cal, MassHealth, TennCare).
• Medicaid refers to more than one program. For this discussion we are referring Medicaid’s long term care services.
• Medicaid’s long term care services can be provided either in an institution, such as a nursing home, or in the home or community, where they are referred to as "Home and Community Based Services".
• Home and Community Based Services are also known as Waiver Funded Services, Medicaid Waivers or simply Waivers.
• Each state has its own Waiver programs and they have unique names.  For example, Ohio has "PASSPORT" for home care and the "Assisted Living Waiver" for care in assisted living.

Definition:

Medicaid provides medical and care service for low-income seniors, the disabled and other financially stressed individuals. If a senior is financially and medically qualified, Medicaid will pay nearly all of his or her long term care costs.

Pros & Cons:

Eligibility Summary (Detailed Medicaid eligibility requirements)
To be eligible for Medicaid, one must be financially qualified; but to be eligible for Medicaid’s long term care services, one must also be medically qualified. Each state considers the following 3 factors for Medicaid’s long term care services:

1. Medical Necessity for Care – an individual is unable to care for him or herself and requires assistance with the activities of daily living or ongoing supervision.

2. Income – In some states, monthly income of the individual cannot exceed $2,022. In other states, his or her income can exceed that amount, provided that the cost of care exceeds the income.

3. Assets / Resources – "Countable Resources" limits, which exclude the care and home, vary from $1,000 to $8,000, but most commonly are $2,000.

If a senior’s financial assets exceed the Medicaid eligibility requirement, but his or her income does not cover long term care costs, he or she is considered to be in the "Medicaid Gap." In this situation, some seniors will "’spend down" their assets on their long term care costs (pay for their care costs out of pocket) until they become eligible.

Obtaining Medicaid and Medicaid Planning
Eligibility for Medicaid is very complex. It is determined differently by each state; and the rules change every year. The impact on the comfort of elderly, as well as the financial implications of not qualifying, can be devastating. For this reason, Medicaid Planners offer services to help families prepare their Medicaid applications to ensure the best possibility of acceptance into the program. Given that it can take 4 or more months to receive benefits, and the cost of care can be thousands of dollar every month, there is a strong incentive to use a Medicaid Planner.

Medicaid Planners serve another role in helping families structure their financial resources to gain eligibility. Many seniors and Medicaid officials seem to have fundamentally different views of Medicaid’s objective. Many seniors feel that they’ve worked their whole lives and paid into a system so that system would care for them in their later years. Medicaid officials view it as a program of last resort for the financially improvised who cannot care for themselves or afford to have others care for them.

Medicaid Waivers
Once an individual is medically qualified they can choose to get a “Medicaid Waiver.” They “waive” their right to the institutional care for which they are qualified in order to live at home (or in the community) and receive care in those locations. These are called HCBS waivers, or Medicaid waivers, or just waivers. Medicaid officials like waivers because they help keep down the cost of care; and families like them because they allow their loved one to continue living at home or in greater comfort in Medicaid-contracted assisted living residence.

Medicaid Waivers and Cash and Counseling
Cash & Counseling is a Medicaid Waivers program available in many states. It allows recipients who are eligible to receive personal assistance services to choose their own home care agencies. In 15 states, family members can act as a “home care agency.” This means that a family member can receive payment for the personal assistance care he or she provides. Learn more about Cash and Counseling.

Skilled Nursing
In all states, Medicaid pays for most nursing home costs, provided the facility is Medicaid certified and the individual eligible.

Assisted Living
At the time of writing, in the following 25 states, Medicaid will pay for some senior’s assisted living fees by way of Medicaid Home and Community-Based Services Waivers. Be sure to check with your state Medicaid office to ensure this information is still valid in your state. The number of states offering assisted living waivers is increasing rapidly and will likely be available nationwide in the coming years.
 

Arkansas California Colorado Delaware Florida Georgia Illinois Indiana Iowa Maryland Minnesota Mississippi Missouri

Montana Nebraska New Hampshire New Jersey Ohio Oregon Rhode Island Texas Vermont Virginia Washington West Virginia

Adult Day Care
Medicaid, through Waivers, will pay for some adult day health care services, provided the care center offers (and the individual requires) health care instead of merely supervision.

In-Home Care
Medicaid pays for some in-home care services if the care provider is certified and the individual requires health care, not supervision.  

Be Aware That:

Once eligibility has been gained, there are no time limits. Although an increase in financial resources in the future can disqualify the individual.

Medicaid is Also Known As:

In addition to its official name, Title XIX of the Social Security Act, Medicaid is referred to using different names in different states. For example:

• In California, it is "Medi-Cal"
• In Massachusetts, it is "MassHealth"
• In Tennessee, it is "TennCare"

Medicaid Home and Community Based Services are also known as:

• Waiver Funded Services
• Waiver Programs
• Medicaid Waivers
• HCBS Waivers
• Waivers

Qualifications for Medicaid’s Long Term Care Services

Age Requirements

To be eligible for Medicaid, an individual must either be over the age of 65 or have a disability.

Disabilities / Health Requirements

Medicaid disability requirements differ by state, but generally speaking, if financially qualified, any person that requires skilled nursing, or is mentally impaired with Alzheimer's/dementia, will qualify. If skilled nursing is not required, then Medicaid ties eligibility to the number of ADLs (activities of daily living) required by the individual, such as dressing, bathing, cooking etc.
 

Family Status

Medicaid does not require individuals to have a specific family status, but the financial requirements change if one is single or married.

Financial Status Requirements

Medicaid Income Limits
The income thresholds for Medicaid eligibility are determined at the state level but all of them use one of two methods:

• Income Cap States use the federal income cap which is 3 x SSI payment standard. For 2010, this limit was $2,022 a month. If one’s income is below this amount, then one qualifies. If it exceeds that amount, it is possible one could still qualify, but will need to work with a legal professional to set up an Income Cap Trust/Miller Trust.
• Non-Income Cap States looks at the applicant’s income and the cost of care. If an applicant cannot afford the cost of care, he or she will qualify.

Income Cap States		Non-Income Cap States
Alabama Alaska Arizona Arkansas Colorado Delaware Florida Georgia Idaho Iowa Kentucky	Louisiana Mississippi Nevada New Jersey New Mexico Oklahoma Oregon South Carolina South Dakota Tennessee Texas Wyoming	California Connecticut Hawaii Illinois Indiana Kansas Maine Maryland Massachusetts Michigan Minnesota Missouri Montana	Nebraska New Hampshire New York North Carolina North Dakota Ohio Pennsylvania Rhode Island Utah Vermont Virginia Washington West Virginia Wisconsin

 

For couples, where one spouse requires care in a facility and the other is healthy enough to remain at home, the spouse living at home is known as the “community spouse” and is entitled to a certain amount of income. The community spouse's income consists of income solely in his or her name plus half of any income that is in the joint name of both spouses.

Medicaid Asset Limits
Medicaid applicants' resources are a major factor in eligibility. Resources might also be referred to as their "assets" or "countable assets." State limits range from $1,000 to $8,000, but most are $2,000. There are a considerable number of exceptions made when determining what qualifies as a resource. For example, the Medicaid applicant's home can be a "non-countable" asset. Others are:

• Clothing, furniture, and jewelry
• One motor vehicle
• Prepaid funeral plans
• Assets that are considered "inaccessible" for one reason or another

There are some additional requirements determined by states for homes to be counted exempt. The applicant must live there or intend on returning to the home. It also must be in the same state in which the applicant is applying for Medicaid. His or her equity in the home must be value at less than $500,000, unless the spouse resides there.

For couples, the "community spouse" is entitled to a certain amount of resources, half of the couple's resources up to $109,560 in 2010. (That amount may be lower in some states.)

Working with a Professional to be Financially Eligible for Medicaid
As mentioned previously, the financial eligibility rules for Medicaid are very complex. There are approaches and strategies that help seniors gain eligibility. It is recommended that seniors consult with Medicaid experts prior to application. Case Managers from the local Area Agency on Aging office may be able to help. Private Geriatric care managers can help as well. Working with a Medicaid Planner ensures the greatest possibility of acceptance while at the same time helping families to preserve as much of their assets as possible.

Veteran Status Requirements

Medicaid is available to both Veteran and non-Veterans.

Geographic Requirements

Medicaid benefits are not available outside the U.S. A homeowner must apply for Medicaid in the same state as his or her primary residence.

Benefits of Medicaid

Types of Benefit Payout

Medicaid benefits come only in the form of payments made directly to medical providers. Seniors do not receive cash payments. However, the Cash and Counseling Program is an exception to this rule. Learn more about the Cash and Counseling Program.

Restrictions on How Payout Can be Used

As Medicaid benefits go directly to the medical and care providers, seniors are not able to use those dollars for other reasons.

Benefits Amounts & Limits

For those elderly enrolled in Medicaid, Medicaid pays the full amount of care, provided the medical service provider is Medicaid certified.

Time to Receive Benefits

Medicaid applications are processed within 45 days after receipt and in 90 days if a disability determination is necessary. However, a family should expect that completing the application process will take several weeks as well.

This Source Can Help For

Long term residence at a skilled nursing facility, in an assisted living community or for seniors living at home or with family.

Costs of Medicaid's Long Term Care Services

Once an individual has been accepted into the Medicaid program, generally speaking, there are no monthly payments; and co-pay amounts are non-existent or very minor.

The Area Agencies on Aging have case managers and benefits counselors who can help with the application process for no charge. However, private Medicaid Planners have a much stronger incentive to ensure a senior’s acceptance into the program. Their fees are typically several thousand dollars, although they very quickly pay for themselves if they are able to help your family retain some assets or get you into the Medicaid program sooner. Even one month of out-of-pocket long term care costs can cover the Medicaid planning fees.

Medicaid applicants should be aware of Medicaid Assistance Estate Recovery (MAER), more commonly known as the Medicaid Death Tax. Should a Medicaid beneficiary have assets that were unavailable, for a variety of reasons, when the individual was receiving Medicaid benefits, the state may claim those assets after the individual passes away.
 

How to Apply for Medicaid

Seniors can apply for Medicaid in their states of residence by obtaining an application from the local Medicaid office. Each state has a different procedure. Alternatively, one can Enroll in Medicaid Online or begin the process by calling 1-800-633-4227.