Page Reviewed / Updated - October 10, 2020
Expert Reviewed By: Joshua Iversen, President, Syzygy Financial LLC
While it is theoretically possible to be eligible for both Medicaid and a veteran’s pension, such as the Aid and Attendance (A&A) or Homebound benefits, in practice, individuals do not receive assistance from both programs at the same time. However, this does not mean that an individual should plan for one program or the other. Both programs should be considered when determining how to pay for home care, assisted living, and nursing home care. This is especially true since at different points in time, many individuals may require each of these types of care. Furthermore, the situation with married couples is different. One spouse can receive Medicaid assistance and the other can receive a veteran's pension.
There are many factors to consider when deciding from which program to seek assistance. While this comparison table offers a quick view, it is important to read the detailed Consideration Factors below to apply this information to one's personal situation.
Medicaid vs. VA Aid & Attendance Comparison Table
|Program||Medicaid||VA Aid & Attendance|
|Other Names||Medi-Cal, MassHealth, and many other state specific names||Enhanced Pension, Basic Improved Pension|
|Regulation||State Level||Federal Level|
|2019 Income Limits||$2,313 / month (for an individual)*||$1,881 / month (for an individual)*|
|2019 Asset Limits||$2,000*||$127,061* (effective 12/01/18)|
|Application Approval Time||2-3 months||6-12 months|
|Best Suited For||Nursing Home Care||Home Care or Assisted Living|
The type of care a person requires is usually the major deciding factor between choosing to apply for either Medicaid or a VA Pension. For those who require home care or assisted living, generally speaking, it is advantageous to use the Veterans Homebound or Aid and Attendance pensions. For those who need nursing home care, Medicaid is usually the better option. While Medicaid does cover home care and assisted living in many states, usually these are not entitlement programs. This means that even if one is eligible for services, they might not receive services, as there are limited slots for assistance available. In addition, very often there are long waitlists to receive assistance. While the Aid and Attendance benefit can be applied toward nursing home care, the maximum benefit amount is far less than the average cost of nursing home care.
A second major consideration is the amount of income and assets an individual or married couple has. Both programs have similar, but not identical income limits. However, Medicaid and VA pensions have vastly different asset limits and use different methods for determining what is considered a countable asset. In strict terms, one might qualify for Aid and Attendance, but not qualify for Medicaid. Another important difference between applying for a VA pension versus Medicaid is that a veteran or surviving spouse’s annual income will also be added to their net worth (assets). And it will be counted towards the net worth limit. (This rule was effective 10/18/18.) However, before adding annual income to net worth, unreimbursed medical expenses can be deducted from the income. This effectively lowers the amount that must be added to one’s net worth.
There is also a look back rule for both programs. However, the look back rule for the VA was only effective as of 10/18/18. Asset transfers made prior to this date are not in violation of the look back rule. The look back rule for the VA is a period of 36-months immediately preceding one’s application in which the VA looks at all transfers during this timeframe. If assets were gifted or sold for less that they are worth, it is thought it was done to meet the asset limit. Therefore, a period of ineligibility will be the penalty. The look back period works the same for Medicaid, but is a 60-month “look back”. (The only exception is California, which has a 36-month look back period for Medicaid). All that being said, it is worth noting that a qualified Medicaid planning professional should be able to assist a veteran in structuring their finances so that they can qualify for either Medicaid or for both Medicaid and VA programs.
An unfortunate factor that must be considered when there is an immediate need for care is the application processing time. A Medicaid applicant can usually begin receiving benefits within 2-3 months. While it is not unusual for a veterans pension beneficiary to wait 6-12 months or longer for their application to be approved. Again, working with a professional planner can shorten the wait time significantly by submitting a Fully Developed Claim.
For some families, it is possible to supplement care expenses during the application wait time with eldercare bridge loans. Veterans pension benefits are retroactive to the date of application. And most approved applicants will receive a large lump sum payment shortly after the award is granted. Therefore, it is a simple process to get a loan for the waiting period and re-pay that loan with the lump sum once they have been approved. Learn more.
Finally, marital status is a consideration. While a single individual cannot simultaneously receive Medicaid nursing home care and a veteran's pension, a married couple can be dually eligible. One spouse can receive Medicaid, and the other can receive the Aid and Attendance benefit. To be clear, one spouse can have their nursing home care paid for by Medicaid, while the other spouse can live at home or in an assisted living community and have some, or all of their care costs, paid for by a veteran's pension in the form of the Monthly Maintenance Needs Allowance or “MMNA”. While this is possible, the administrative paperwork necessary to make this a reality is exceedingly complex. It is highly recommended that couples in this situation consult with a Medicaid planning professional who is also knowledgeable about veterans’ pensions and the Aid and Attendance benefit.
How best to apply for Medicaid and / or a veterans pension depends on the applicant's situation. As these applications are complicated, and the approval time lengthy, it is advantageous to get help from an expert before the initial application instead of waiting to seek guidance after the application is rejected.
If the applicant is single and they are certain that they meet all the eligibility requirements, they should contact their local Area Agency on Aging for Medicaid or their local Veterans Service Office for VA Pensions.
If the applicant is married, does not meet the strict eligibility limits or is at all uncertain about their eligibility, they should consult with a Medicaid Planner or Veterans Benefits Planner before application.