Understand the Basics of
LTC Medicaid & Medicaid Planning
Preserve Life Savings
Let Us Do the Work
Get the Care Your Loved One Needs
Understanding Your Options
Applying for Long-term Care Medicaid is a personal decision, and although thousands of people complete the process each year, it’s different for everyone.
Many things can impact the Medicaid process and its outcome.
It’s important to understand the basics of Long-term care Medicaid including the eligibility requirements and the options to become eligible if you are not.
Too often families are told that their loved one has to spend down all of their savings to qualify. This is simply not true. There are Medicaid compliant strategies available to prevent or decrease the amount that would have to be spent down.
Why Medicaid Planning?
The process of applying for Long-term care Medicaid is both time-consuming and frustrating. There are often long delays. Only to find out a small error on one form means you have to start the process all over, and if you answer incorrectly, you could be denied Medicaid benefits. Negatively impacting the individual and their entire family.
In addition to the challenging process, most people seek out Medicaid planning for three reasons.
- Because their income and resources are over the financial eligibility limits, they are concerned about spending down their savings to apply.
- They have a barrier to eligibility like a rental property, and they don't know how and if they can overcome it.
- They are overwhelmed by everything going on and caring for their loved ones. They do not have eligibility issues, but they want a Medicaid planner to assess their case, complete the application and file it.
What is Medicaid Planning?
The term Medicaid planning encompasses a wide variety of services provided by professionals. It can be as simple as assisting with documents and the Medicaid application or as complicated as re-structuring one’s financial assets while following Medicaid’s strict guidelines. A Medicaid planner will give you a broader view of your options so that you can make an educated decision on what is the best choice for your loved one and family.
Medicaid Planning Will Generally Address
- EXPOSURE: Which assets are subject to the spend-down and which are protected.
- STRATEGY: Develop a strategy to protect the exposed assets from the spend-down when possible. Savings can still be reallocated even for those who are already in a facility or receiving homecare.
- ELIGIBILITY: Prepare and file the Medicaid application as well as seeing the process all the way through to approved Medicaid benefits. Dealing directly with the social services office for you. So that you don't have to spend hours on the phone.
Long Term Care (LTC) Medicaid Basics
What is LTC Medicaid?
Medicaid refers to more than one program, as there are many different eligibility groups within each state’s Medicaid program. Long-term care Medicaid is for the elderly and disabled and it’s what is used to pay for care.
Medicaid definitions & details on programs click here
- Long-term care Medicaid is provided both in nursing homes and in the “home or community”, which includes home care, adult day care, adult foster care, PACE and assisted living. These are called “Home and Community Based Services” or HCBS.
- Home and Community Based Services can be provided under the regular state Medicaid program or through Medicaid Waivers.
- Each state has its own Waivers, and they have unique names
- It may require a spenddown of assets.
- It does not require total impoverization.
- There are rules in place to protect some assets and income for the healthy spouse.
- Penalty for transfer of assets (5-year lookback).
Am I Eligible for LTC Medicaid?
To be eligible for Medicaid, one must be both financially qualified and have a medical need for care. Eligibility requirements are specific to the state, the Medicaid program or waiver. Therefore, there are hundreds of different sets of eligibility rules for LTC Medicaid services throughout the USA. However, there are some general rules that apply.
- Be 65 or older, have a permanent disability, or be blind
- US citizen or qualified non-citizen
- Meet the Income and asset limits
- Physical and medical criteria based on an assessment
- Residency rules that vary based on state
Check to see if you qualify using our FREE Medicaid Eligibility Form
Medicaid's Strict Medical and Financial
Eligibility Requirements
Medical
The medical requirements for long-term care Medicaid differ significantly by state. In general, any individual who requires continuing skilled nursing care has Alzheimer’s or dementia or cannot care for themselves qualifies. If professional nursing care is not required, then many Medicaid programs link eligibility to the number of ADLs (activities of daily living) with which an individual requires assistance. This can include dressing, bathing, eating, cooking, etc. Most states require a “nursing home level of care,” but each state defines it differently.
Financial
When determining eligibility for long-term care Medicaid, each state considers finances differently. However, in all states, both one’s income and assets are considered factors.
Assets
For a single person in most states, the asset cap in 2022 is $2000.
Married couples can have considerably higher asset limits, but only if one spouse is not applying for Medicaid. The non-applicant is referred to as the “community spouse.” In 2022, the community spouse is permitted up to $137,400 in countable assets in most states. This is in addition to the assets the applicant’s spouse can keep. Whose assets exceed Medicaid’s countable limits should not automatically consider themselves ineligible.
Income
In most states, for someone going into a facility, their income simply can’t be enough to pay the average cost of care in a facility in their area. Home care/waiver programs are a little more complicated and vary a lot from state to state.
**For all requirements we are speaking in general terms. It's important to find out the specific requirements and rules for your state.
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Expert Assistance Makes All the Difference
It’s worth getting expert help when applying for Medicaid benefits. You can get the support you deserve with professional representation while protecting your assets.
You will feel confident knowing:
- We will Lower family stress by explaining options and laying out a clear plan.
- Take care of restructuring assets to comply with Medicaid eligibility requirements. Often preserving income and savings.
- Maximize the monthly maintenance needs allowance if you are a spouse to ensure you have adequate income
- Prepare and file the Medicaid application. Then we process that application through to approval. Directly dealing with the social services office so you don’t have to.
- Keep you updated throughout the process and excitedly call you as soon as your loved one is approved.
What People Are Saying...
“My husband’s battle with Alzheimer’s took a sudden turn for the worse… I needed assistance with the Medicaid application process… I was referred to Lynn owner at SRP by a relative who shared a success story of her own.
The Medicaid application process can be overwhelming… SRP provided me with step-by-step instructions throughout the process… Their level of detail and knowledge was outstanding with everything explained clearly and thoroughly… my husband was approved for Medicaid. Our assets were also successfully addressed to allow for financial security. Their patience and kindness were evident throughout the process and very. much appreciated. I would highly recommend their services…
Pat W., Pennsylvania
What If I’ve Been Denied for Medicaid Coverage Before?
If you’ve already applied for Medicaid and been denied, don’t give up! Senior Resource Planning can help you through the appeals process and hearings. With the high cost of care on the line, you need to use every tool at your disposal to protect your lifestyle and your legacy. Claimants who go into the appeal and hearing process with a qualified representative presenting their case have a dramatically higher success ratio than those attempting Medicaid Appeals without any help.
Medicaid Planning Examples
Meet Peter and Alice
Peter is 79 and has just entered a nursing home. His monthly bill will be $8,000 a month. His wife Alice who is also 78 tells us she is worried the nursing home cost will quickly drain their assets.
She was informed that Peter’s income would go to the nursing home and she would have to “spend down” their assets to cover the balance. Once her assets are spent down to meet Medicaid eligibility she could apply for Medicaid for Peter. Alice was in tears. She did not know how she would be able to live on just 1,600 a month.
- Peter’s Income form social security is $2,100 a month
- Alice’s income from social security is $1,600 a month
- Assets totaled $400,000
- Obtain immediate Medicaid eligibility for Peter
- Increase Alice’s income
- Preserve their assets
Following a thorough intake and the purchase of two funeral expense trusts equaling $14,000 we were able to determine that based on their states Medicaid eligibility rules they had to spend down $253,000.
Peter’s IRA of $150,000 was put into an MCA -Medicaid compliant annuity with the monthly payment going to Alice utilizing the “name on the check” rule. The remaining $103,000 was put into another MCA in Alice’s name.
Purchasing the MCA’s eliminates their excess countable assets, and Peter becomes immediately eligible for Medicaid benefits. With the payments from both MCA’s Alice’s income goes from $1,600 a month to $4,795 a month. We also took over the whole process of applying for Medicaid so that Alice could focus on everything else that was happing with Peter going into the nursing home.
- Peter received immediate Medicaid eligibility. His cost of care was now changed to the amount of his social security minus his $50 personal needs allowance. Making his co-pay is now $2,050 saving the couple $5,950 a month.
- Alice’s income increased from $1,600 a month to $4,795 a month.
If they chose not to move forward with the plan, they would have exhausted their entire spend down amount of $253,000 in less than 32 months and Alice’s income would have remained at $1,600 a month.
Meet Sally
After being diagnosed with dementia, Sally (82) enters a nursing home that costs $8300 per month. In order to avoid losing her life savings to pay for long term care, she wants to leave something for her children. She also owns a piece of rental property with her daughter which they purchased just one year ago. Sally’s daughter was really concerned about what to do. She did not want to sell the rental property.
- Sally’s income from social security $1,800 a month
- Assets $150,000 including the rental property
- Cost of care $8,300 a month
- Obtain Medicaid eligibility for Sally as quickly as possible.
- Preserve her assets
- Create a wealth transfer to the next generation including the rental property
Following a thorough intake it was determined that after the purchase of a $10,000 funeral trust Sally had to spend-down $138,000.
The first step was to transfer the property with a value of $50,000 to the daughter. This created a $50,000 gift.
Along with the property an additional $25,000 was gifted to Sally’s children.
With a total gift to her children in the amount of $75,000 that left a balance of $63,000
The $63,000 was put into an MCA for Sally. The income from the MCA paid the nursing home during the penalty period that we had created by gifting the $75,000.
- Sally made a wealth transfer to her children of $75,000.
- The property was transferred to the daughter so that she now had full ownership and did not have to sell it to achieve Medicaid eligibility for her mom.
- We utilized an MCA with the balance of Sally’s assets to pay the penalty period created by gifting the property and money to her children.
- Once the penalty period was over Sally’s MCA would be fully paid out and she would qualify for Medicaid.
Walter Needs Homecare
Walter is 78 and needs homecare. His wife Pam is unable to provide all the care he needs and she doesn’t want him to go to a nursing home.
Pam inquired about applying for Medicaid to help with costs. She was told she had too many assets and that she would have to spend them down first. Pam and Walter depend on the income from their investments to live. She did not know what to do.
- Walter’s Income from social security is $1,800 a month
- Pam’s income from social security is $900 a month
- Assets totaled $200,000
- Obtain immediate Medicaid eligibility for Walter
- Have enough income
- Preserve their assets
Following a thorough intake we were able to determine that based on their states Medicaid eligibility rules they had to spend down 100,000.
$100,000 was put into an MCA -Medicaid compliant annuity in Pam’s name.
Purchasing the MCA’s eliminates their excess countable assets, and Walter becomes immediately eligible for Medicaid benefits. With the payments from the MCA Alice and Walter maintain enough income to live on. We also took over the whole process of applying for Medicaid so that Pam could focus on everything else.
- Walter received immediate Medicaid eligibility for homecare services. His cost of care was now covered by Medicaid.
- Pam’s income increased by $1,388 a month with the use of the MCA replacing the income that they used to get from their investments.
- Pam and Walter maintained $100,000 liquid for emergencies and othe expenses.
If they chose not to move forward with the plan, they would have exhausted their entire spend down amount of $100,000 in less than 19 months and their income would not cover their expenses.
*These examples are for educational purposes only
Frequently Asked Questions
Medicare and Medicaid are two very different programs that cover different things. Let’s review what each program covers and does not when it comes to nursing home costs.
Medicare
Medicare consists of two parts Part A and Part B. You can also purchase private Medicare Supplement, Medicare Advantage, and Part D (Prescription Drug) plans that include additional benefits and reduced cost-sharing (copays, coinsurance, deductibles). In most cases, to qualify for Medicare, you must be 65 years old. However, there are some other ways to qualify, including permanent disability.
Medicare Part A (hospital insurance) covers Medicare in-patient care that is care received while in a hospital, skilled nursing facility, and, in certain circumstances, at-home treatment.
Medicare Part B (medical insurance) covers medical services provided by doctors, nurses, and other health care professionals. Part B coverage includes outpatient care, ambulance services, preventive services, and durable medical equipment. It also covers part-time home care and rehabilitative services, including physical therapy.
Medicare does NOT cover long-term nursing home or in-home care.
Medicaid
Like Medicare, Medicaid provides comprehensive in-patient health care coverage, including services and costs associated with nursing facilities and rehabilitation facilities. To qualify for Medicaid, you must meet certain criteria that differ from state to state, and the rules are incredibly complex. They are generally based on having very low income and assets. This is different from Medicare that generally uses age as the primary qualifying criteria.
Medicaid CAN cover long-term nursing home or in-home care provided you meet the criteria for needing long-term care.
Medicaid is the single largest payer of nursing home bills in America. It has become, by default, the long-term care insurance provider for middle-class Americans who can’t afford private Long Term Care insurance. The average cost of a nursing facility is $115,000 per year and rising. If you or a family member needs long-term care, it will not take long for the average family to deplete all of their savings. More than 68% of all nursing care recipients now rely on Medicaid to pay their Long Term Care costs. Working with a professional Medicaid planner is the best way to determine if you or your loved one can qualify for Medicaid and put plans in place to give you the best chance of preserving assets while still qualifying for Medicaid.
Financial Eligibility
The Affordable Care Act established a new methodology for determining eligibility for Medicaid, based on Modified Adjusted Gross Income (MAGI). Medicaid will review both income and assets to determine eligibility for the program.
Non-Financial Eligibility
To be eligible for Medicaid, individuals must also meet specific non-financial eligibility criteria. Medicaid beneficiaries generally must be residents of the state in which they are receiving Medicaid. They must be either citizens of the United States or certain qualified non-citizens, such as lawful permanent residents. Some eligibility groups are also limited by age, pregnancy, or parenting status.
The simple answer is yes. However, Medicaid does have strict guidelines around what you can protect and under what circumstances. You may retain assets and still qualify; If the applicant has a spouse, the Medicaid eligibility criteria may differ. A couple may keep assets up to $125,600, and home equity limits are as high as $552,000 (PA), $828,000 (NJ). Some exemptions allow spouses to keep resources and income from the applicant. Making a mistake and overspending resources may result in the spouse who still lives in the community, spending significant money that could otherwise have been funded through Medicaid. This can create a situation where the spouse no longer has adequate resources or income to live. Single applicants have options also.
It is critical to work with a professional who understands the Medicaid rules to avoid common mistakes that can leave applicants vulnerable to periods of ineligibility and financial hardships.
Although Medicaid has asset limitations, you do NOT have to be poor to qualify. You can utilize Medicaid planning solutions to preserve what you have worked so hard for your entire life. We work with families that have small and large amounts of assets.
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Nobody should lose their life savings to pay for their care. The right guidance can get you the best care without going broke or uprooting your life or the life of those you love.
