How do I qualify for Long Term Care Under Medicaid?: Part II Financial Need - Spokane, North Idaho News & Weather

How do I qualify for Long Term Care Under Medicaid?: Part II Financial Need

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(provided by Dick & Karen Sayre, Sayre & Sayre, p.s.)

Medicaid's long term care program is a based upon need, both physical and financial.  There are two gatekeepers you must satisfy to obtain benefits under the long term care program and each of the gatekeepers has two parts.  In this Part 2, we'll look at the second requirement to obtain benefits under the Medicaid long term care program.  The second gatekeeper you must satisfy to obtain benefits of Medicaid is to prove financial need.  It also has two parts.  The first part requires you to prove the value of the assets owned by the applicant and a spouse, if any, on the first day of the month in which you are requesting benefits to start.  The second questions whether you have given any assets away in the previous 60 months.

If you are a married couple seeking nursing home care, you must "spend down" to a combined total of one-half of your "available" resources (which does not include the house, one car and other  resources not counted by Medicaid at the time of application), with a minimum allocation of $47,104 ($45,104 for the well spouse, and $2,000 for the ill spouse), and a ceiling of  $106,400 ($104,400 for the well spouse and $2,000 for the ill spouse),  in total "resources" (which term is defined to include separate and community property) prior to Medicaid qualification.  If you are seeking to obtain benefits for care in a hospital or nursing home, the ill spouse is able to retain $2,000.00, and the well spouse is allowed up to $104,400.  If you are a married couple seeking COPES in home or community based care (such as care provided by an Adult Family Home or other non institutional setting), your ceiling is only $47,104, with $45,104 for the well spouse, and $2,000 for the ill spouse.  Please note these figures are accurate as of January 2008 and will change at least once during the year.

This ceiling is known as the Community Spouse Resource Allowance, or CSRA.   By way of example, if your spouse was placed into a nursing home and, at the time of placement, your "available" resources, exclusive of your home, car and other excluded resources, totaled $220,000, you would be allocated $104,400 (½ of the total up to $104,400, with a minimum of $45,104), and your spouse would be allocated $2,000.00.  If you had $100,000 at the time of placement, you would be allocated only $50,000.00, and if you had $70,000.00, you would be allocated $45,104.  If your spouse applied for in home care under the COPES program, or was placed in an Adult Family Home, you would not be entitled to a CSRA because your spouse was not "institutionalized" as that term is defined under our regulations, so you would be limited to $45,104, regardless of your asset based at the time of placement.

The relatively complete protection available to a well spouse under prior law has been  slowly eliminated.  In actuality, the well spouse may retain between $45,104 and  $104,400 (depending upon needs and asset base at the time of institutionalization), while the ill spouse is limited to $2,000.00 (requiring an interspousal asset transfer in most any case). This determination (of how much the well spouse may retain) is made at the time of institutionalization, not application.  The upper limit for a single person remains at $2,000.00 in total assets

Certain exemptions are carved out as excluded from these calculations.  These include such things as the family home of unlimited equity value so long as a spouse or "dependent" or disabled child resides therein, or a home with equity value not in excess of $500,000.00, provided the single disabled person plans to return thereto following recovery, clothes, an automobile, burial insurance, income producing property (subject to certain equity limitations), certain investments, real estate contract equity in some types of property, special governmental payments for redress and the like, certain highly specialized annuity products (not the normal deferred annuity most folks have), assets held in certain highly specialized trusts, and other miscellaneous items.  Note that the area of exempt assets is a changing landscape, with modifications almost monthly.  What was acceptable last month may no longer be, so use of exemptions to qualify for Medicaid or similar assistance programs requires the intervention and assistance of skilled professionals.  As money gets tighter, more and more restrictions are anticipated.

In the case of spouses who are forced to "spend down" to the then applicable spousal limit, you must still complete an interspousal asset transfer within one (1) year of Medicaid acceptance, although most attorneys recommend that the transfer be effected as soon as possible, due to constantly changing state and federal guidelines.  With the aggressive lien recovery laws now in effect, interspousal transfers are necessary to avoid a recovery lien, so this process has taken on far greater importance from a lien avoidance standpoint.

If a gift has been made within 60 months prior to the Medicaid application being submitted it must be disclosed.  A formula will be used to determine the period of ineligibility created by the giving away of assets.  The formula takes the total value of all gifts given during a calendar month and divides that sum by the current average cost of a nursing home bed in the State of Washington.  That number changes every October first.  The current average cost of a nursing home bed is $206.00 per day in 2008.  Transferring assets between spouses is not a gift and does not create a period of ineligibility.  To learn more about the impact of gifting, please review the discussion about giving away assets to qualify for Medicaid.

You also need to be aware of Medicaid lien issues.  The Government has very broad authority to recover against the estate of a person who received Medicaid assistance, including against life estates and the property from which the life estate was originally retained.  If you or loved one is on Medicaid and they own property, estate recovery is an issue for you, and you must seek competent legal counsel prior to the death of the Medicaid recipient, and discuss strategies available to minimize the impact of these severe laws.  Failure to act will most certainly result in estate recovery lien claims when the Medicaid recipient passes on.

(Sayre and Sayre is a Spokane-based law firm specializing in Elder Law issues)
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