Long-term care, whether provided in a private home, a nursing home, an assisted living facility or a continuing care retirement community, is expensive. The median national rate for a private room in a nursing home in the U.S. is $102,200 each year according to the Genworth Cost of Care Survey 2019.
Many family caregivers and seniors assume these costs will be taken care of by Medicaid, the jointly funded federal and state program that provides health insurance for people with low income and limited assets. When it comes to long-term care, this public assistance program does pay for the largest share of these services, but only if a senior meets strict financial and functional requirements. Medicaid is administered by each state, so keep in mind that criteria can vary considerably from one state to another.
Eligibility Requirements for Long-Term Care Medicaid
The most basic and universal requirements a person must meet to qualify for Medicaid include being a U.S. citizen (or a qualified non-citizen) and meeting residency rules in the state where the applicant intends to apply.
Additionally, an applicant must:
- Be age 65 or older; OR
- Have a permanent disability as defined by the Social Security Administration; OR
- Be blind.
Most states automatically provide Medicaid eligibility to applicants who apply and are deemed eligible for Supplemental Security Income (SSI). However, there are a handful of states who use the same eligibility guidelines but require an applicant to file separate SSI and Medicaid applications to receive both benefits. You can learn more about SSI benefits at SSA.gov.
Medical and Functional Criteria for Medicaid Long-Term Care
To receive long-term care services paid for by Medicaid, an applicant must need a “nursing home level of care.” A medical specialist in the state conducts a needs assessment of the applicant and determines if they require care in a nursing home, care in an assisted living facility or if they are a candidate for home- and community-based services (HCBS) like in-home care services and adult day care. (HCBS are a slightly different type of Medicaid program aimed at delaying or preventing applicants’ placement in institutional facilities like nursing homes. These services are typically provided through Medicaid waivers, which allow applicants who require a nursing facility level of care to receive appropriate services in their own homes and communities.)
Each state defines its own nursing facility level of care criteria, and the explanations are often very complex or vague. However, the requirements for meeting a nursing home level of care typically include a combination of medical, functional and cognitive components.
Medically, an applicant may need to be certified as requiring frequent skilled nursing care from a licensed nurse (e.g. assistance with injections, IVs, catheter care or other medical devices and treatments). An applicant’s functional level is commonly determined by assessing their ability to perform activities of daily living (ADLs). The six ADLs are eating, bathing, dressing, continence, toileting and transferring/mobility.
Criteria relating to cognitive abilities are often more difficult to define and quantify. Many states account for the special long-term care needs of seniors with neurodegenerative conditions like Parkinson’s disease, Alzheimer’s disease and other forms of dementia in their nursing home level of care requirements. However, even if dementia-related symptoms like memory loss and sundowning are not specifically mentioned in a state’s Medicaid guidelines, progressive neurological conditions also take a toll on a senior’s health and ability to function independently.
Medicaid Long-Term Care Financial Eligibility Requirements
Medicaid is a program designed to help individuals with low incomes and limited assets get the health coverage they need. State Medicaid programs set strict income and asset limits when determining whether applicants qualify financially.
- Medicaid Income Limits
Some sources of income are counted by Medicaid, while others are not. Income limits vary by state and are typically based on the Social Security Administration’s set federal benefit rate. The hard income limit for Medicaid in 2020 is $2,349. Some states have “medically needy” programs that allow seniors who are over this limit and have high medical bills to still qualify by “spending down” their excess income.
- Medicaid Asset Limits
Some assets are included in Medicaid’s requirements, while others are considered non-countable assets. Exempt assets include the applicant’s primary residence, their personal belongings, one motor vehicle, property essential to self-support, whole life insurance with a face value under $1,500, certain prepaid burial arrangements and assets held in specific kinds of trusts.
Unless specifically excluded, any other real or personal property is counted in the Medicaid eligibility determination. The general asset limit for Medicaid in most states is $2,000 but may be higher in some states. Different rules and limits apply for married couples where only one spouse is applying for long-term care covered by Medicaid.
Part of determining a senior’s eligibility is a five-year look-back at their financial statements. Any indication that an applicant has transferred assets for less than fair market value (FMV) in the five-year window prior to their application will disqualify them and trigger a penalty period. (In some states, the look-back period may be shorter.)
If a person has reasonable income and assets but meets Medicaid’s medical and functional criteria, they must typically pay for care out of pocket until their assets have been significantly diminished to Medicaid limits. It is important to seek more detailed information and guidance from an attorney before initiating any kind of spend down strategy for income or for assets. Medicaid planning is not a do-it-yourself project.
What Services Does Long-Term Care Medicaid Cover?
Medicaid Long-Term Services & Supports can be provided in a variety of settings, but some seniors’ needs are best met in an institutional setting. A Medicaid beneficiary must reside in a Medicaid-certified nursing facility for their care to be covered. States may specify the types and limitations of some services that can be provided, but federal regulations require that certified nursing homes must offer the following services at a minimum and at no charge to Medicaid residents:
- Skilled nursing and related services
- Specialized rehabilitative services (treatment and services required by residents with mental illness or intellectual disability that are not provided or arranged for by the state)
- Medically related social services
- Pharmaceutical services (with assurance of accurate acquiring, receiving, dispensing, and administering of drugs and biologicals)
- Dietary services individualized to the needs of each resident
- A professionally directed program of activities to meet the interests and needs for the well-being of each resident
- Emergency dental services (and routine dental services to the extent covered under the state’s Medicaid plan)
- Room and bed maintenance services
- Routine personal hygiene items and services
Applying for Long-Term Care Medicaid
If you or an aging loved one need assistance with applying for Medicaid to pay for long-term care, contact your state’s Area Agency on Aging and consider working with a reputable elder law attorney who is knowledgeable about Medicaid planning in your state.
For state-specific Medicaid information, contact your local Medicaid agency or visit Medicaid.gov.
Sources: Medicaid Institutional Long-Term Care (https://www.medicaid.gov/medicaid/long-term-services-supports/institutional-long-term-care/index.html); Medicaid Eligibility (https://www.medicaid.gov/medicaid/eligibility/index.html); 2020 SSI and Spousal Impoverishment Standards (https://www.medicaid.gov/sites/default/files/2020-01/ssi-and-spousal-impoverishment-standards_0.pdf); Medicaid Nursing Facilities (https://www.medicaid.gov/medicaid/long-term-services-supports/institutional-long-term-care/nursing-facilities/index.html)