If you are checking into nursing home care and Medicaid coverage for the first time you’ll find yourself on a steep learning curve. Most of us do not think much about finding and paying for a nursing home until a crisis hits. This post gives you a quick overview about nursing homes and how Medicaid can help pay for care.
Medicaid is a government health care program that helps pay long-term care expenses. The person needing care must meet both financial and level-of-care guidelines. Support is only provided to nursing homes previously certified by Medicaid. Medicaid-approved facilities need to offer three basic services:
- Skilled nursing or medical care and related services
- Rehab that is needed due to an injury, disability or illness
- Long term care that offers services and care that are health related and needed due to a physical or mental condition
- You have to be meet Medicaid’s income and asset rules to get help paying nursing home care, The patient is limited to no more than $2,000 in “countable assets”. Countable assets include just about anything that can be turned into cash. “Non-countable assets” include your home and all connected lands or buildings as long as their equity value is $525,000 or less. Texas rules also exclude one automobile, certain funeral arrangements, burial plots, and personal items like clothing and household furnishings.
- Not all nursing homes accept Medicaid payments. When checking out a facility, ask whether they accept Medicaid patients. A Medicaid certified facility means the nursing home meets certain minimum care requirements. The facility is also inspected annually to ensure they meet Federal and state guidelines.
- The person needing care must be “sick enough” to get Medicaid. He or she must need “medically necessary” care. In Texas, the medical determination is made by a state agency called the Texas Medicaid and Health Partnership. That agency makes its decision based on input by the nursing home’s Director of Nursing.
- If the patient has income above Medicaid’s monthly limit they can get financial assistance if they pass their income through a Miller Trust. The trust is an attorney-created document that legally reduces the amount of “countable income” below the income limit.
- You can enter a nursing home facility as a private pay patient and pay for care out of your own pocket. Medicaid law provides a number of options to “spend down” to the become asset eligible while still protecting assets. Once you are financially and medically eligible, Medicaid will provide financial support.
- The rules regarding eligibility for Medicaid are very strict. Giving away assets is allowed but making gifts exposes you to serious penalties and delays. The Texas Department of Health and Human Services is very serious about having you to understand these rules. Medicaid looks back five years to see whether you’ve done anything to reduce your assets. Handled poorly previous gifts can create significant financial penalties.
- Medicaid lets the person needing care keep a small amount of money for basic needs. This means you can keep a small amount of cash to pay for things like snacks and personal products. Called the “personal needs allowance” in Texas, the amount is $60 for 2016. Unless the person is married, all other income must be used to pay health insurance premiums and the cost of nursing home care. If the patient is married, they may be able to divert part of the income to their spouse.
- When you apply for Medicaid for nursing home care, you are required to report your assets. If you are married, they also consider the assets held by your spouse. Medicaid law protects a certain level of assets and income for a spouse who is not living in a nursing home.
- A Revocable Living Trust is useless in protecting assets for your family. Since the trustee has the right to revoke the trust, Medicaid rules expect you to do so and use the money for care expenses.
- Home ownership plays a big role in your Medicaid eligibility and coverage. You can structure the home so Medicaid ignores the value when determining eligibility. Home equity can work against you if the value of the home exceeds $525,000. If you do not take steps otherwise, the state can demand repayment for care received once the patient dies (known as “Medicaid Estate Recovery”).
These quick tips about Medicaid and nursing homes barely scratch the surface.