My mom age 72 has a pension and ss income of 2186 monthly. DOes this make her ineligible for Medicaid? . She has Alzheimer's and we are transferring her to a memory care home. WE have been able to have her in an assisted living without spending her savings but now the price of care doubled! She also has assets of 70k which we will spend to help cover costs and a life insurance policy with face value of 50k, which also seems to complicate eligibility for medicaid. SHe lives in TX and has no spouse. Is there any advice about how to spend down money even with lifetime annuity that she received as part of her retirement? I ve asked about taking a lump sum but that is not allowed. Or is private pay our only option long-term?

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NH (aka skilled nursing facility/SNF or long term care/LTC) is paid for 3 ways: 1) private pay by either the elder or their family; 2) from LTC insurance; or 3) by qualifying for Medicaid. If they live long enough, they will run out of funds.

Medicaid rules determined by each state & are state specific even though it is a federal & state program. Medicaid is needs-based.You are expected to spend your assets first and foremost before the state will pay. There are things you can do to reduce assets but these need to be done by someone qualified to provide advice on this do that will pass your state's review. An certified elder law attorney is best.

For NH Medicaid eligibility, an individual must show that:
1) are 65+,
2) have medical condition requires that level of nursing care,
3) monthly income at or below their states max (about 2K),
This is the “income test”– how much $ do you make. TX is $2,094.
4) all countable assets are at or below 2K
This is the “asset test” – how much $ do you own.
5) not gifted away anything of value during 5yr look-back period.

If you do, there could be a “transfer penalty” when items are gifted. Penalty different for each state as it’s based on each state’s NH reimbursement rate. For TX, it is $ 142.92 a day rate. TX NH reimbursement rate is pitiful low too.

Max look-back is 5 yrs. Most states require 3 – 6 mo. of financials with initial Medicaid application. Can require more financials if something pique’s interest.

INCOME: If it is that every month they are over the states income limit BUT not enough to pay in full for the NH and qualifies for NH in every other way, then they can see an elder care attorney to do a "Miller Trust" or a "Qualified Income Trust". Say mom gets 1K from SS & 1,500K from retirement every mo. Income=$2,500. Basically $ 500 over ceiling for monthly income. No matter what is always is $500 over. So this excess $ 500 is what funds the trust and therefore mom’s income is now 2K. The beneficiary of the trust is state's Medicaid program and upon death reverts to the state. Miller really has to be done by an attorney who does elder law as it needs to be flexible/adaptable and meet the criteria of each state's law on probate (death laws) & Medicaid rules.

ASSETS: All assets counted, except for short list of "noncountable" assets:
- personal possessions,
- a vehicle (some states have a limit on the value)
- their principal residence, provided it is in the same state in which the individual is applying for coverage & the house may be kept with no equity limit if "community spouse" lives there; otherwise the equity limit is 500K (750K in some states)
- prepaid funeral (irrevocable, No Cash Value, usually 10K max)
- small amount of life insurance (usually $1,500 & NCV) If policy has a cash value it must be redeemed with the proceeds used to pay for her care or needs.
All other assets (savings, stocks, whole life, rental property) are counted.Must “spend down” to get to their states max to qualify. Spend down needs to be on items they need for daily activities. Good items to spend down on are dental care, glasses, hearing aids (all spotty coverage on Medicaid).

For my mom's TX Medicaid application, the packet was about 100 pages of documents - mainly due to her old school style insurance and funeral policies as TXDHHS wants a copy of all pages, front and back. 3 months of all financials and a letter from all her banks as to all accounts closed out over the past 3 years and disposition on them. Took about 4 months to process her financial one (of which most of the delay was with mismanagement at the NH business office) and then 4 months to deal with an appeal on crediting issues with her 2ndary health insurance policy. TXDHHS was helpful but they have tight deadlines for compliance, so you have to be tiptop quick to fax them what they have a ? on. Keep all documents as she will need to gets recertified annually - again last 3 mos of financials.

Remember Medicaid is both financial and medical qualifications, most AL is not paid by Medicaid unless you can get her on a waiver program.Remember once they are on Medicaid, they get a monthly personal needs allowance to spend. For TX, it's $ 60.00 a month. That's it, so anything else she needs has to come from family. So if she has a car or a home, somebody other than mom will need to pay for all on the car or home. The NH will have a trust account that you can do for her for going to hairdresser or for shopping if they do that. About the life insurance, who owns it? If you can transfer ownership then it will no longer be her asset.
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