If an elderly person has an income that is higher than Medicaid limit, but no assets, how are they expected to pay for nursing home?

They go to an elder law attorney who helps them with their own state's rules.
The entire income will likely go to the facility with the exception of allowable allowance, so that includes SS, pension and etc.

They are cared for by family members at home, as there is no other option. Unless they can find a board and care facility at $3000 per month or thereabouts, willing to take them in. This has been a dilemma for ages now. An elder care attorney can only do SO much!

Medicaid is incredibly State-specific. See a Medicaid planner in your parent's state.

https://www.agingcare.com/discussions/medicaid-planning-484793.htm?orderby=recent

Ideally what happens is they do is a Qualified Income Trust aka a Miller Trust and hopefully she lives in a State that allows for these to be done. Some States have it so that it’s relatively easy to do…. I’d try to speak to someone at your area on Aging as to if Miller is done in your State and if so how approached. If not then she does something that is similar and you’ll have to find a CELA level of elder law attorney to guide you in doing whatever it ends up being. Not a DIY.

in a nutshell this is how Miller works: most States have as the monthly income max set at $2742. For really old elders, they get under 2k in only SSA so they are OK on income. These are the elderly who get the average SSA payout of $1200 / $1500 a mo. They are easily impoverished. But for younger retirees, like your mom, they worked and make lots more $ paid into the SSA system so many are close to the SSA max of $3300. Like your mom. (And many are still working at 75 too! Plus getting the max on their SSA $). Plus She has ever more $ with a lil extra pension. But even with this still not enough to pay for a NH at 10K or more a month.

Enter Miller. What it does is become legally the erstwhile owner of the retirement income that is guaranteed and solid in its source. SSA retirement income is such a guaranteed income and it becomes owned by the new Miller Trust. Voilà! That $3200 a month of moms is no longer hers, so now she only has that teeny pension as her only income so totally ok for LTC Medicaid limitzs. What will probably be highly encouraged to happen is to make the NH the representative payee for the Miller Trust. So NH gets her sSA $ paid to them directly via the Miller. Her pension too will be a copay to the NH as well but from this one, will more than likely be the one that her smallish personal needs allowance comes out of. The PNA varies by State. From $35 -$135. Most States do $50 or $60 and it’s designed to pay for hairdressers, clothing replacements and toiletries.

fwiw allowing the NH become her rep payee has pros & cons. It will make paying for care way waaaay simpler. The biggie on cons is that should you ever want to move her from this NH it will be beyond a beast to ever do this as getting a rep payee changed back and to another payor is quite difficult if not impossible as SSA does not recognize POA. So mom would have to be competent and cognizant enough to be able to deal with doing changes via SSA system to do a rep payee change month or years from now.

Having high SSA retirement income is going to be more & more common as lots of folks are going to be younger retirees needing a NH sooner due to Covid imho. They are going to be 75 or under and worked with pretty good salary and making the max SSA retirement as is their spouse. They are over the standard $2742 to start with. The Miller Trust or something like them really will come in super useful if your State allows for it.

They cobble together care at home or find a place that is within their income budget. Some get roommates and split the cost of caregiving. Some move in with their children and then often their children come on this forum to complain about their parent driving them crazy and wrecking their marriage/home life.

$3200 in monthly income might cover the cost of a shared room but definitely not in a high cost of living area. Look at small, private care homes. Good luck.

Read what Igloo572 wrote. See if Miller Trusts are a thing in her state.

Hopefully you know that Medicaid doesn't pay for AL or MC in most states. One needs to medically qualify for LTC or NH/skilled nursing care plus qualify financially. Most states' Medicaid programs have a 5-year look-back period on the financial application. Most facilities' Medicaid beds means that your LO will be in shared room.

You can talk to a Medicaid Planner for her home state, which may be more fruitful than a CELA (certified elder law attorney). Usually a CELA will be able to recommend Medicaid Planners that you can call.

If you're an old person like me, you probably WORRY-- a LOT. "The Golden Years"?--not so much! My spouse (94) and I (soon to be 87) did plan and tried to provide for our old age. We married in our 40s and retired at ages 76 (him) and 78 (me) from careers in the nonprofit sector. We bought long-term care insurance (the premiums are now VERY pricey), but we didn't have the time or resources to accumulate a $1 million retirement fund. So, we have too much to qualify for any assistance but definitely not enough to pay $8-10K+/month to a care facility for long. On top of that, we NEVER anticipated living as long as we have. Surprise!!

Big problem. Major dilemma that I constantly hope "resolves" before we need facility care. (We are committed to NOT making life miserable for our adult children by becoming dependent on them for care.)

This is a question that many seniors are facing today! You almost feel "guilty" for having the non-qualifying income that you do. Especially when you see many "lower income" seniors qualifying for MANY benefits (i.e nursing homes) over and over. However, there is nothing you can do about it. If you have no family to support you, little assets, and are elderly, your future looks bleak and scary. I read that there is a higher percentage of seniors committing suicide nowadays. America does not have controlled state healthcare like many other countries. Seniors are last (if at all) on the list with our government. A sad reality to swallow.

Medicaid skilled nursing home coverage is a 2-test thing. First, the individual must meet and remain below the State's income limit threshold AND ALSO one must meet the "level of care" requirement your State uses. As other have said, each State is slightly different on both accounts: asset limit and the level of care needs and the later the State will not necessarily tell you what that specifically is. That said, generally a person who cannot do 2 or more ADLs AND 2 or more IADS may qualify IF they have a medical need.

The six standard ADLs are generally recognized as bathing, dressing, toileting, transferring (getting in and out of bed or chair), eating, and continence. IADLs, or Instrumental Activity of Daily Living, are more complex sets of skills we need in order to live independently. These skills are: using the telephone, shopping, preparing meals, housekeeping, using transportation, taking medication(s), and managing finances. If a loved one (LO) cannot do several of these tasks AND has a medical need which required skilled nursing care; once one has spent down one might qualify for Medicaid long term care; but a nursing home does NOT have to take your LO. One just does not call up and say take them.

Often, after a LO was hospitalized (say they had a bad fall and perhaps need PT/rehab) OR perhaps they need IV antibiotics for a few weeks post an inpatient hospital stay; as part of the discharge planning the social workers at the hospital can help arrange a temporary post acute care hospital discharge to a nursing home (Medicare likely will pay for some of this stay). That can start things, if one has lots of other things in place. POA, Advanced Directives, you having access to all accounts, on and on.

YES have an elder care attorney in your state help with all of these documents AND IMPORTANTLY to review the paper work you/your LO might have to sign when entering the nursing home post a hospital stay. Make sure you do NOT agree to be personally financial responsible AND make sure YOU do not accept responsibility to take them back OR to work out a safe discharge for them. THAT NEEDS to fall on the nursing home to work out.

If there are no assets at all (no home, no care, no funds in a IRA, not stocks, on and on); then one can "spend down." Fees to a lawyer to help you with this should be paid out of you LO's funds; this is an allowable expense for Medicaid. Ditto, all funeral expenses should be prepared out of your LO's funds; this also is an allowable expense. Then if the LO enters a nursing home; work with your attorney to figure out how much to "pre pay" the nursing home to assure their total asset level is below, well below, the State's threshold AND THEN APPLY for long term Medicaid nursing home coverage IF the physician at the nursing home believe your LO would qualify for the "level of care" YOUR State requires. The nursing home folks generally know what that is and they will have to fill out paperwork on their end; such as having a diagnosis of dementia or other medical conditions requiring long term nursing care from a physician AND other paperwork confirming inability to preform some of those ADLs/IADLs.

They would then be "Medicaid pending" and once approved (may take a few weeks or months) then they are in. BUT THERE IS LOTS of paperwork to collect NOW before applying. You'l need all bank, financial accounts, taxes filed, pension/social security payments, IRA distributions on and on GOING BACK 5 years! Any assets which has been sold (home/car), transferred, gifted needs to be accounted for. ALL of this paperwork is submitted to your State when you LO applies for Medicaid. If you have online access to all your LO's accounts, records, this is easier and goes faster. Your attorney can help with all of this. Once approved; your State Medicaid office will determine the monthly amount your LO must pay to the nursing home; the so-called "cost of care contribution" to pay each month.

Speaking from experience - if you do decide to retain an elder law attorney, or any attorney, to assist in your planning - do not hire one who wants to provide a total package, i.e., "look back" planning to get you to the financial level where you qualify for Medicaid, a new will, a "Family Support Team", a medical advance directive, annual updates, etc. I bought in to one of those packages, then found out that it was nothing but a money maker for the attorney. The best way to go is with a well researched, highly recommended attorney, who charges by the hour. They may charge three or four hundred per hour, however, in the long run you will get what you pay for, and probably be a lot better off all around, including financially.

This doesn’t help with your mother’s situation because of the Medicaid look-back period, but it can with your own.

Trusts are not limited to the wealthy. Setting up a medicare asset protection trust (MAPT) is one way of getting qualified.

An MAPT allows a person to qualify for long term care benefits from Medicaid, while protecting assets from being depleted if long-term care is needed.

I’m the caregiver for my 85 yo dad. He can’t qualify for Medicaid subsidies in a nursing home, and like your mom, he doesn’t have enough to pay out of pocket. This experience has taught me to listen to my financial planner. He’s mentioned setting up a trust for a couple years. I didn’t understand until I tried to get my dad into a care facility.

I’m in my early 60s with no children. My retirement will be comfortable but I know I can’t afford 8k a month, and who knows what the cost will be by the time I need one.

I’m setting up appointments to move assets to medicare trust in early 2024. It’s scary because there are drawbacks to any type I choose. It will be the cost I pay for peace of mind.

https://www.fidelity.com/learning-center/wealth-management-insights/understanding-medicaid-trusts

Get advice of an eldercare attorney and social worker who understands about Medicaid where the resident lives. Once approved about three months before assets, if any, run out, Medicaid will cover the difference between total income and cost of the nursing home.

planner99: Retain an elder law attorney.

My BIL had soc sec and a small pension too. What I did for him is to get him onto Medicaid(Iowa). What Medicaid did was to take his SS and pension minus $50 and that is what was paid to the NH. Then Medicaid came in and paid the rest of his amount. His NH bill was in the $8000 range so his SS and pension plus what Medicaid pays for equals to that $8000 range.

People who don't deal with Medicaid get somethings wrong. They tell you, you have to be under that $2000 range(Iowa) that is for personal finances meaning what you can have in an account for that person. In my BIL's case he had under the $2000 that was put into a separate account in the NH so that if he needed clothes, wireless minutes, electric shaver, hair cuts anything like that they will get it for him and it comes out of that account. The $50 that comes out every month goes into that account.

Apply for Medicaid if your mother is going into a NH some help you with that paperwork. I had to provide all my BIL's financial paperwork including bank statements. In my BIL's case he had a life insurance policy that he had to cash out and put towards his funeral. He couldn't have that policy because it could be cashed out at any time. And that is what Medicaid would want to know, had to send them that paperwork what he did with the cash out. But other states maybe different than Iowa.

Prayers

I wanted to add in and comment on the what other countries do? Honestly, many countries are struggling with this question of how to care for the elderly. Not defending the US approach; just noting that because of the sheer number of those in the Baby Boom population in western industrialized countries are now at the age when health issues and cognitive decline present (they need care); the declining birth rates of those behind this generation, who may care for or contribute to the tax base to handle these expenses, is becoming smaller over time; AND advances in medical care keeping folks alive well beyond their 70s where so many of these issues of dementia, the impact chronic diseases (like diabetes being the leading cause of blindness) and the consequent IADL/ALD problems present; this is a huge problem in many countries.

There are many complex reasons why it is such a hot mess in the US. We do not have any national approach to long term care other than Medicaid once one has no assets/has spent down. Health care is patchwork of many plans, programs, services and it is expensive. Long term care insurance is not really a realistic approach for many and not many companies sell such policies now.

At the same time, we have a huge and growing shortage of doctors, nurses and other health care professionals. The cost and time it takes to become a physician (or other health care provider) is way out of bounds now for many. And post COVID, so many health care providers have retired or are changing careers.

And then, the US population -- unlike some developed countries -- has a huge problem with obesity, diabetes and sedentary lifestyles that contribute to worse health and higher health costs. Just walking more -- as is common in other countries -- goes a long way to keeping folks healthy, mobile and not overweight. Diet too is better in many other countries, where folks eat more veggies, fruits and no so much red meat or fried foods.

It is a bit of a "cluster" -- you know what I mean.

Medicaid is the single largest payer for long term care coming it at $207.0 billion in in spending as of 2021. This a combined state and federal spending figure. And the spending and costs are going up, will continue to rise significantly as more folks spend down and qualify.

Most folks do NOT know that Medicare does NOT pay for long term nursing care!

Only about 13% of Americans have purchased a separate long term care insurance policy. Policy premiums are going way up and most private insurers no longer sell such policies.

None of this well get resolved ANY time soon. IMHO folks need to learn ASAP what the cost of long term care and similar service are AND to be aware of what is covered or NOT by which program before one is in a crisis or one's loved one is in a crisis.

An elderly person with an income higher than what Medicaid allows is not expected to pay for a nursing home on their own.

What is expected is that their monthly income gets turned over to the nursing home every month with a small bit (usually under $100 a month) held back that is for their personal use. Then Medicaid picks up the rest of the bill.

So the $3,000 a month your mother gets would go to the NH. The other $5,000 or more left on the bill will be paid by Medicaid.
Once the nursing home "reduces" her income by about $2,900 a month, she will qualify for Medicaid.

Book in the Nolo Legal Series (nolo.com): "Long Term Care: How to plan and pay for it." By Attorney Joseph L. Matthews. Topics listed on Cover:
-Estimate the cost of care;
-Find out if Medicaid will pay;
-Protect loved ones' assets.

Try to get the latest edition, which I believe is the 13th (2020).

You still, even if you digest/go through the entire book, have to do a lot of research work on your own. If it was published in 2020, most of the information probably came from 2019 or before. Even in 2020, the pandemic was not yet in full swing. Medicaid has changed in many if not all states, with many vulnerable populations being cut from the program.

But still, it's a good start. If your library doesn't carry this, they can do what's called an Inter-Library Loan. They will get it for you (in a while...) and you can have it for about 3 weeks.

Good luck.

My mom is in the same boat. We met with an elder attorney and set up a Miller Trust and we had the atty fill out the paperwork for Medicaid. A Miller Trust is used when the person makes too much to qualify for Medicaid but not enought to support themselves. It is a royal pain in the butt but a necessary one. I have to move money into the trust every month and make sure that by the end of the month mom has less than $2,000 in her checking account. I pay her bills out of the trust money and buy her day to day items out of the checking account. Medicaid will tell you what portion is yours to pay and what portion they will pay...It is a constant shell game of moving the money around. Hang on to every receipt and copy of bill. I also use carbon copy checks so that when questioned about money coming out of the checking account, I can quickly take a look at the checkbook and tell what the expense was for...haircut, new bra's, a dentist visit, etc.

You need to be really poor or really rich. The folks in the middle are the ones that bare the brundt of everything and jump through the hoops.

I think the best advice I can give you is to stay organized with her paperwork and keep all receipts.

The Medicare/Medicare programs are very state specific and you did not mention what state you live in. I would make friends with anyone at your local office so they may guide you. The Community or care home she is in may also be able to direct you. There are patient advocates as well that may assist. M.