Seventy percent of people over the age of 65 will need long-term care services. Many people believe that Medicaid will cover all the costs of long-term care. However, while Medicaid does cover some of the costs of long-term care, you must meet many eligibility requirements – and they vary greatly from state to state. To qualify for Medicaid, you must must meet three categories of requirements: eligibility, functional and financial requirements.
This raises many questions among caregivers and their elderly parents regarding the financial requirements necessary to quality for long-term care Medicaid coverage. Here are some of the most common questions and answers regarding Medicaid and long-term care, provided by the National Clearinghouse for Long-Term Care.
How much can I have in assets and still qualify for Medicaid?
Asset levels vary from state to state. States have the option to raise the minimum amount. In most states, you can have only about $2,000 in countable assets (check with the Medicare.gov website for the most up-to-date asset amounts). In most states, married couples can only have about $3,000 in countable assets if they are still living in the same household.
If one spouse lives in a long-term care facility and the other spouse is still living at home, Federal law allows the spouse at home to keep more assets. In general, the spouse who lives at home is allowed to keep half of the married couples' combined assets, subject to both a minimum amount and a maximum amount.
How does Medicaid evaluate assets?
Medicaid evaluates all assets to determine whether you meet the state's financial criteria for eligibility. You will be required to provide documentation of all assets.
What if assets exceed the Medicaid-allowed limit?
If your assets exceed the amount allowed by Medicaid, the application will be denied. If denied, Medicaid informs you how much of your assets exceed the allowances. If you feel the asset evaluation is incorrect, you have the right to appeal the state's determination. Or, you can choose to reduce assets to become eligible in the following ways:
- Convert funds to non-countable assets such burial arrangements.
- Pay existing debts such as insurance and taxes.
- Spend the money on medical needs and day-to-day health care maintenance needs.
Under Federal law, a person applying for Medicaid cannot reduce or transfer assets to others (for example, children) for the purpose of qualifying for Medicaid coverage of long-term care services. Doing so may result in a significant penalty period. During that time, even if assets have been totally depleted, you will be unable to receive Medicaid payment for long-term care.
What does Medicaid consider transfer of assets for eligibility?
A transfer of assets is giving away property for less than it is worth in order to qualify for Medicaid coverage of long-term care. If you transfer assets, Medicaid may not pay for your long-term care.
Does Medicaid allow asset transfers?
Certain asset transfers, such as a transfer to a spouse or a disabled or blind child, are not considered disqualifying transfers.
How far in the past will Medicaid look to see if I have made a transfer?
Medicaid will look at all asset transfers made in the five-year period prior to the Medicaid application. This is referred to as a "lookback period."
How are transfers of assets penalized in the Medicaid eligibility process?
Asset transfers are typically penalized by disqualifying you from becoming eligible for payment for long-term care for a specified period of time. Transferring assets may result in disqualification.
Qualifying for Medicaid to pay for long-term care can be a long, tedious and confusing process. To get help, contact your state's Area Agency on Aging or your State Medical Assistance office.