Long-term care, whether provided at home, or in a nursing home, assisted living facility, or continuing care facility, is expensive. The average annual rate for a private room in a nursing home is about $92,378 (according to the 2016 Genworth Cost of Care Survey).
Many family caregivers and their elderly parents think these costs will be taken care of by Medicaid, the joint federal and state program for impoverished people. In regards to long-term care, this public assistance program does pay for the largest share of these services, but only if you meet strict financial and functional criteria. Because Medicaid is administered by each state, these criteria vary considerably from one state to another.
Medicaid and Long-Term Care
In some cases Medicaid will cover the costs of long-term care, but there are eligibility requirements that applicants must meed in order to receive assistance. First and foremost, Medicaid is a program designed to help those who are impoverished. In order to qualify for assistance through Medicaid, the applicant must spend practically all of his or her own assets before Medicaid will begin to pick up the tab. If a person has reasonable income and assets, they will most likely pay for care out of pocket until their assets have been significantly diminished.
Sometimes you must spend down (or use up) your personal assets before you can qualify for Medicaid. However, it is important to seek more detailed information from your State Medical Assistance office and guidance from an attorney before initiating a spend down. Medicaid planning is not a do-it-yourself project.
Medicaid pays for long-term care services in both institutional settings (like assisted living and nursing homes) as well as in the home. To qualify for Medicaid, you need to meet three categories of requirements:
- General Medicaid eligibility requirements
- Functional requirements
- Financial requirements
General Criteria for Medicaid Eligibility
In order to qualify for Medicaid, recipients must:
- Be age 65 or older or permanently disabled or blind; and
- Meet U.S. citizenship or immigration rules; and
- Be a resident of the state where they apply.
Functional Criteria for Medicaid-Covered Long-Term Care
To receive long-term care services under Medicaid, the applicant must be assessed and determined to be in need of these services. A medical specialist in the state evaluates the applicant's care needs. As part of this assessment, the specialist determines if the person needs nursing home care, assisted living or if they are a candidate for home and community-based services.
The need for long-term care is generally determined by whether the individual can perform the six activities of daily living on their own, or whether they need assistance from another person. These activities include bathing, dressing, using the toilet, transferring (to or from a bed or chair), caring for incontinence, and eating. If your elderly parent does not meet Medicaid's functional eligibility criteria, then they cannot receive long-term care services under Medicaid, regardless of their financial situation.
Financial Criteria for Medicaid
State Medicaid programs will assess both available income and assets in determining whether you qualify for the program. They also conduct a five-year look-back to ensure their legitimate candidacy for the program.
Some of your income is considered countable income, while other sources may not be counted for Medicaid purposes.
Some assets are included in Medicaid's requirements, while other assets are excluded. Exempt assets include a primary residence, personal belongings, one motor vehicle, property essential to self support, life insurance with a face value under $1,500, certain 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.
If you or your loved one need assistance with applying for Medicaid to pay for long-term care, contact your State Medical Assistance office or your state's Area Agency on Aging and consider working with a reputable elder law attorney.