Dear Savvy Senior:
What are the eligibility requirements to get Medicaid coverage for nursing home care?
-- Looking Ahead
The rules and requirements for Medicaid eligibility for nursing home care are somewhat complicated and will vary according to the state you live in. With that said, here's a general, simplified rundown of what it takes to qualify, along with some resources you can turn to for help.
Medicaid, the federal and state joint program that covers health care for the poor, is also the largest single payer of America's nursing home bills for seniors who don't have the resources to pay for their own care.
Most people who enter nursing homes don't qualify for Medicaid at first, but pay for care either through long-term care insurance or out-of-pocket until they deplete their savings and become eligible for Medicaid.
To qualify for Medicaid, your income and assets will need to be under a certain level that's determined by your state. Most states require that a person have no more than about $2,000 in countable assets that includes cash, savings, investments or other financial resources that can be turned into cash.
Assets that aren't counted for eligibility include your home if it's valued under $525,000 (this limit is higher -- up to $786,000 -- in some states), your personal possessions and household goods, one vehicle, prepaid funeral plans and a small amount of life insurance.
But be aware that while your home is not considered a countable asset to determine your eligibility, if you can't return to your home, Medicaid can go after the proceeds of your house to help reimburse your nursing home costs, unless your spouse or other dependent relative lives there. (There are some other exceptions to this rule.)
After qualifying, all sources of your income such as Social Security and pension checks must be turned over to Medicaid to pay for your care, except for a small personal needs allowance -- usually between $30 and $90.
You also need to be aware that you can't give away your assets to qualify for Medicaid faster. Medicaid officials will look at your financial records going back five years to root out suspicious asset transfers. If they find one, your Medicaid coverage will be delayed a certain length of time, according to a formula that divides the transfer amount by the average monthly cost of nursing home care in your state.
So if, for example, you live in a state where the average monthly nursing home cost is $5,000 and you gave away cash or other assets worth $100,000, you would be ineligible for benefits for 20 months ($100,000 divided by $5,000 = 20).
Medicaid also has special rules for married couples when one spouse enters a nursing home and the other spouse remains at home. In these cases, the healthy spouse can keep one half of the couple's assets up to $113,640 (this amount varies by state), the family home, all the furniture and household goods and one automobile. The healthy spouse is also entitled to keep a portion of the couple's monthly income -- between $1,838 and $2,841. Any income above that goes toward the cost of the nursing home recipient's care.
What about Medicare?
Medicare, the federal health insurance program for seniors 65 and older and some younger people with disabilities, does not pay for long-term care. It only helps pay up to 100 days of "rehabilitative" nursing home care, which must occur after a hospital stay.
Again, Medicaid rules are complicated and vary by state, so contact the local Medicaid office (call 800-633-4227 for contact information) for eligibility details.
You can also get help from your State Health Insurance Assistance Program (SHIP), which provides free counseling on all Medicare and Medicaid issues. To find a local SHIP counselor visit shiptalk.org, or call 800-677-1116.
Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org. Jim Miller is a contributor to the NBC Today show and author of "The Savvy Senior" book.