There are two requirements which determine eligibility for Medicaid nursing home care – financial requirements and medical requirements. The financial requirements are comprised of income limits and asset limits, which were detailed in the prior week’s blog. The level of care requirement entails that the applicant needs care that is usually provided in a nursing home. A formal designation is called “Nursing Home Level of Care” (NHLOC), which requires a medical doctor to make this designation and the rules that define it vary from state-to-state.

Nursing home care/Institutional Medicaid is an entitlement, therefore If an applicant meets the financial and level of care requirements, a state must pay for that individual’s nursing home stay. Home care and assisted living are not considered entitlements. An applicant can meet all the eligibility criteria for home care or assisted living and still be wait-listed to receive assistance.

“Assisted Living Eligibility”

How does Medicaid pay for assisted living/senior living since it is not an entitlement? Those who reside in assisted living residences receive assistance from Medicaid either through HCBS Waivers or through the state’s Aged, Blind and Disabled (ABD) Medicaid.

HCBS Waivers are geared to help individuals who require a nursing home level of care but prefer to receive that care while living at home or living in assisted living. HCBS Waivers will not pay for the room and board costs of assisted living but will only pay for care costs. Waivers are not entitlements. They are federally approved, state-specific programs that have limited enrollments. Many HCBS Waivers have waiting lists. An individual can be financially and functionally eligible for an assisted living waiver and still not be able to enroll due to the waiting list.

The eligibility requirements are the same for both Medicaid assisted living through a Medicaid HCBS Waiver and for nursing home care. Candidates must require “nursing home level of care” and meet all the financial requirements.

Aged, Blind and Disabled (ABD) Medicaid provides help for persons in assisted living differently than Waivers. It provides beneficiaries with a caregiver and the beneficiary can use that caregiver at their place of residence. So, the individual could live at home or in an assisted living community. As long as the beneficiary does not reside in a nursing home, it’s irrelevant where they live.

ABD Medicaid will not pay for assisted living room and board, only for care.  Additionally, it will necessarily pay for all of individual’s care needs. The good news about ABD Medicaid (when compared to waivers) is that ABD Medicaid is an entitlement, so the Medicaid program must provide an applicant with the assistance needed, so long as he or she meets the eligibility criteria. Although ABD Medicaid typically has more restrictive income limits than Medicaid Waivers or nursing home care, it usually does not insist that beneficiaries need a “nursing home level of care.” ABD Medicaid financial eligibility criteria varies according to each state

“In-Home Care Eligibility”

Medicaid beneficiaries can receive assistance in their home through a Home and Community Based Services (HCBS) Waiver or through Aged, Blind and Disabled (ABD) Medicaid. These are two different types of Medicaid programs with different eligibility requirements.

HCBS Waivers offer home care as a benefit throughout each state. Unfortunately, HCBS Waivers are not entitlements. Therefore, being eligible does not necessarily mean one will receive care. It is very likely one will be put on a waiting-list for assistance. Waivers have the same level of care and financial eligibility criteria as nursing home Medicaid.

“Options When Over the Limits”

At times, individuals or couples exceed Medicaid’s income or asset limits, yet they can’t afford to pay for needed care. In these circumstances, Medicaid offers different types of pathways to meet eligibility.

“Medically Needy Pathway”

Medically Needy Medicaid is currently available in 32 states and D.C., is a great option. The Medically Needy Pathway, considers the Medicaid candidate’s income AND their care costs. If Medicaid finds one’s care costs consumes the vast majority of one’s income, then Medicaid will allow the individual to become eligible regardless of how high their income is.

In New Jersey, the program is called the “Medically Needy Program” or the “Special Medicaid Program, Medically Needy Segment.” It’s also commonly referred to as a “spend down” program for excess income. The income amount that is over the Medicaid eligibility limit is used to cover medical bills and health insurance premiums.

“Medicaid Planning”

Medicaid Planning is a strategy for assisting individuals whose income or assets exceed Medicaid’s limits can become Medicaid eligible. They can seek assistance from a Medicaid expert who can re-structure their finances to help them become eligible.

Side Note:

Callahan Financial Services Group takes the guesswork out of applying for Medicaid benefits for long-term care. If you or a loved one are in need of these benefits, please do not hesitate to call us at (973) 325-7500. Our friendly staff is here to help you and answer any of your questions. We can also arrange an appointment to meet with you in person at our office to discuss your eligibility and explain the application process, including the necessary items to apply.

Cited Sources:

https://www.medicaidplanningassistance.org/medicaid-eligibility

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Reviewing the application

Prior to submitting a Medicaid application, prospective beneficiaries should review the Medicaid application guidelines. They will need to have a list of items ready in order to properly fill out the application. Knowing if you meet eligibility requirements and knowing how to best prepare your list of line items, is crucial when you begin your application. For example, those with incomes that are too high to qualify for Medicaid applications are allowed to spend it down in order to have their applications approved or set-up a Qualified Income Trust (Q.I.T.) depending on the state. Since applying for benefits can be very complicated and time consuming, it’s usually beneficial to have some expertise so it’s wise to hire a Medicaid specialist who will guide you through the entire process.

Medicaid Eligibility

To be eligible for Medicaid, you must meet the requirements for an eligibility group that your state covers under its Medicaid program. An “eligibility group” can be defined as individuals who meet certain criteria, such as an older adult or a person with a disability and having income and assets below certain levels. There are many different eligibility groups in the Medicaid program, and each one has its own set of requirements. States are required to cover some groups but also have the option to cover or not cover others. Regardless of the specific eligibility group, someone applying for Medicaid must meet at least four types of requirements to qualify for Medicaid.

1. General Medicaid Requirements: You must be one of the following to be eligible for Medicaid – be age 65 or older, have a permanent disability as that term is defined by the Social Security Administration, be blind, be a pregnant woman, be a child, or the parent or caretaker of a child. It is also required for an applicant to be a U.S. citizen or meet certain immigration rules, be a resident of the state where you apply, and have a Social Security number. With the elderly, Medicaid has two types of eligibility requirements – functional and financial. For functional eligibility (depending on the type of Medicaid program) applicants must show they require the level of care provided in a nursing home or an intermediate care facility. For financial eligibility, Medicaid will look at both the applicant’s (and spouse’s if a married couple) total resources, which includes their income and assets.
2. Income Requirements: You must also have limited income, as well as assets to be eligible for Medicaid. The amount of income you can have also varies by state and depending on which eligibility groups each state covers. When the state determines your financial eligibility for Medicaid, the state will count your income. Your income includes these sources – Regular benefit payments such as Social Security retirement or disability payments, veteran benefits, pensions, salaries, wages, interest from bank accounts and certificates of deposit, dividends from stocks and bonds. In 2019, a single individual 65 years or older must have income less than $2,313 monthly. This applies to nursing home Medicaid, assisted living (in the states which cover it) and in-home care typically provided through a state’s HCBS Waivers. Income limits are different if the applicant is married or if both spouses are applying for Medicaid. A married couple’s income is counted separately. In most states, each spouse is allowed $2,313 or a combined income of $4,626 monthly. If one spouse applies for Medicaid, the non-applicant can be allocated by some of the applicant’s income in order to help them continue living at home when their spouse enters a nursing home facility. This is called the Minimum Monthly Maintenance Needs Allowance (MMMNA). For this year, most states allow a non-applicant spouse to receive a maximum amount of $3,160.50 per month.
3. Asset Requirements: The Medicaid asset limit also referred to as the “asset test,” can be complicated due to several rules that need to be considered prior to determining if an applicant would pass this test. First, there are “countable assets” and “exempt assets.” An applicant’s home and furnishings are usually exempt. Secondly, assets for married couples are counted as joint assets, in contrast to income, which is counted separately. Thirdly, asset transfers made by the applicant are counted up to five years preceding their application date (or 2.5 years in California). This is known as the “Medicaid Look-Back Period.” If there is a violation at any point during this period, it may render someone ineligible for Medicaid for a period of time. In 2019, most states permit a single applicant aged 65 or older up to $2,000 in countable assets in order to be eligible for nursing home Medicaid or HCBS Waivers. Also depending on the state, those who are aged, blind or disabled Medicaid usually have the same asset limit or permits just a few thousand dollars more in assets. For married couples, both who apply and are usually allowed to have $3,000 on countable assets to qualify for Medicaid.  With a married couple where only one spouse applies, the applicant is permitted to transfer assets to a non-applicant spouse, referred to as a Community Spouse Resource Allowance.  Also In 2019, community spouses are allowed to have countable assets valued at $126,420.  The home is excluded as long as the community spouse resides in it and the equity value of the home doesn’t exceed the maximum amount $878,000. This amount can also vary per state. Due to the complexity of the Medicaid asset test, sound planning is very important because there are ways to help applicants with Medicaid eligibility despite being over the limit.
4. Medical Requirements: The medical or “level of care” requirement for Medicaid for seniors varies based on the type of Medicaid program one is seeking assistance from. For example, long-term care in a nursing home requires a high level of care need. “Aged, Blind or Disabled” (ABD) Medicaid requires that the applicant be over 65 years of age, blind or disabled. Rules for a nursing home’s level of care requirement changes per state. with program participants requiring a minimum of assistance with their Activities of Daily Living (ADL), which entails bathing, grooming, dressing, eating, toileting, and mobility. Most cases will require a medical professional to complete an assessment in order to determine the level of care someone would require in order to perform ADLs. Also, a medical diagnosis of Alzheimer’s Disease, Parkinson’s and other dementia doesn’t guarantee an individual will meet the requirement for Medicaid’s level of care. However, the conditions are serious enough to meet the criteria, or have a pending status to soon qualify, due to the individual’s progressive decline in health.

Callahan Financial Services Group helps individuals apply and get approved for Medicaid. Call today for a free consultation at (973) 325-7500.

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Today

As of this year, Medicaid covers 1 in 5 Americans, including many with complex and costly needs for care. A large percentage of Medicaid enrollees lack access to other affordable health insurance. It covers a broad array of health services. It also limits enrollees and out-of-pocket costs. It also provides about one-fifth of all personal health care spending in the U.S. It covers financing for hospitals, community health centers, physicians, and nursing homes.

Medicaid Eligibility

The program rules for who can be eligible for Medicaid, including the services that are covered, are based on federal guidelines. However, states are given some flexibility in what is offered in Medicaid coverage with their programs. Since states are required to cover certain groups of individuals, they do have the option to cover additional services due to the allowance of eligibility rules and services varying state to state. Those who meet eligibility must meet certain requirements, among which is having income that does not exceed the levels issues by the particular state they live in. Once the state determines if someone is eligible for Medicaid, a determination will also be made if that person is also eligible for Long-Term Care (LTC) services.

Long-Term Care Coverage

Medicaid covers Long-Term Care (LTC), which entails services and supports necessary to meet health or personal care needs over an extended period of time. A long-term facility, also referred to as a Nursing Home or Convalescent Care Facility, provides general nursing care to those who are chronically ill or unable to take care of daily living needs. Most long-term care services assist people with Activities of Daily Living, such as dressing, bathing and using the bathroom. It can be provided at home, in the community, or in a facility. LTC helps meet health or personal needs services, which include medical and non-medical care for people with a chronic illness and disability. Payment for LTC services are for those who meet Medicaid eligibility because they require a level of care equivalent to that received in a nursing facility. LTC insurance is designed to offer financial support to pay for those services. Applying for LTC services There is a look pack period, which entails a five-year period, to a person’s application for Medicaid payment for LTC services. A Medicaid state agency will determine if any transfers of assets of have taken place during that period of time that would disqualify the applicant from receiving Medicaid benefits for a period of time, referred to as “the penalty period.”

Care in Your Home

When you live at home and not at a facility, the Medicaid program refers to you as living “In the community, and Medicaid will still cover certain services if you qualify. There are many states which provide a program entitled “Home and Community Based Services.” Prior to 2007, a state that provided coverage for those living outside of a nursing home needed to apply for a specific “waiver” of the usual Medicaid rules. Since then, the states are authorized to provide the program without having to obtain a waiver. Those seeking coverage still would need to verify with their state’s HCBS programs, which can be limited to certain kinds of disabilities and location they reside in. State may also cover those who currently reside in a nursing home with the option of living in the community. They would have the same level of care, as well as be covered be covered by Medicaid.

Assisted Living

Under an HCBS program in most states, there Medicaid coverage can pay for certain services even if you live in an assisted living facility. The facility must be “Medicaid certified,” so you it’s important to make sure of that requirement when looking to move into a facility. Also, it’s important to note that the facility’s cost of basic room and board will not be covered by Medicaid as it would be in a nursing home.

Nursing Homes

Medicaid typically will cover the full nursing home bill. This includes room, board and all nursing care costs. Even though 58 percent of all nursing home beds in the U.S. are filled by patients on Medicaid programs, not every nursing home accepts Medicaid payments. It’s very important to know if a nursing home accepts Medicaid patients before choosing one. It is against the law to for a nursing home too evict a patient if they run out of money and m us transition from private pay to Medicaid. However, this would not apply for a nursing home that does not accept Medicaid. It becomes difficult for a nursing home resident to switch to another facility once they have become adjusted to a nursing home for good. They have made friends and have become accustomed to routines and the nurses who give them care. Another important factor to note is that a specific federal regulation requires nursing homes to offer the same exact policies an provide equal services to all residents regardless of how the bill get paid. Staff members typically will not have any knowledge of which patients pay the facility through Medicaid and which ones pay privately. *The Medicaid office in your state will provide information about qualifying and applying for Medicaid, including qualifying for long-term care services.

Cited Sources:

How to Protect Your Family’s Assets from Devastating Nursing Home Costs: Medicaid Secrets 2016 Edition (K. Gabriel Heiser, Attorney). 10 Things to Know about Medicaid: Setting the Facts Straight; (Henry J. Kaiser Family Foundation (KFF) – Robin Rodowitz, Rachel Garfield and Elizabth Hinton) http://files.kff.org/attachment/Issue-Brief-10-Things-to-Know-about-Medicaid-Setting-the-Facts-Straigh https://longtermcare.acl.gov/medicare-medicaid-more/medicaid/index.html USLegal.com/Medicaid/History; https://medicaid.uslegal.com/history/

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I have a single premium life insurance with my children as beneficiaries. If I change the ownership to the beneficiaries will I qualify for NJ Medicaid after 5-year look back period.  What are the consequences of such a change?

See our response on NJ.com  http://www.nj.com/business/index.ssf/2018/04/will_medicaid_count_my_life_insurance.html

The simple and short answer to your question is yes if you change the ownership of the life insurance policy before the five- year look-back period then the whole life insurance policy would be exempt from Medicaid spend down.

When it comes to life insurance Medicaid is not concerned with the insured of a life insurance policy or who the beneficiary is but rather who is the owner of the policy.    The owner has legal rights and can access the funds at any given time, since a Medicaid applicant cannot have more than $2,000 in assets, having access to the additional funds in the life insurance policy could jeopardize eligibility.   If your child is the owner, you would have no access to the funds.  Many people change the ownership of their life insurance policy as a planning strategy.

Let’s review the Medicaid rules for Life insurance:

A Medicaid applicant may own one or more small whole life policies. The total combined face value(s) of $1,500 or less is considered “exempt” and will not affect the Medicaid application, anything exceeding this amount will be countable.   So, for example, a $3,500 dollar policy with cash value of $1,800 would disqualify the applicant from receiving Medicaid benefits since the policy cash value exceeds the $2,000 limit.

Term life insurance cannot be cashed out and thus has no value. Therefore, it is not a “countable” asset under Medicaid rules.

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If you are not required to go on Medicare, you can continue participating in your group plan and maintain status quo. Upon retirement or when you decide to leave the group plan, you will have an opportunity to enroll in Medicare without any penalties provided you can show proof that you have had credible health coverage equal Medicare’s coverage. During that time you can select a Medicare Supplement, Part D & Medicare Advantage plan.

If your employer requires you to sign up for Medicare Part A & B, you will need to know if your employer will allow you to participate in the group health plan. The group plan would become primary, and Medicare would be the second payer. When you leave the group plan, you will have Special Enrollment Period that will last for eight months. However, the period for enrollment in a part D plan and a Medicare Advantage plan is only 63 days.

You may also decide to forgo the group plan altogether and sign up for an individual supplement plan. You should do a cost and comparison.

Most workers will consider adding Medicare Part A because it is free; It covers institutional care in hospitals and skilled nursing facilities, as well as certain care given by home health agencies and provided in hospices. If your employer group plan is a high-deductible health plan paired with a health savings account, you should NOT sign up for Part A, once you enroll in Medicare, your HSA contributions must stop.

The post Do I need to apply for Medicare If I am still working? appeared first on Callahan Financial Services Group.

1)  Does the 5-year look-back period translate into a discrete time period based on the amount of money gifted during that 5-year look-back time? For example, if a person gifted to others a sum of $60,000 in several gifts since late 2016, is that divided by $12,895 to give a “penalty period” of 4.65 months? Or is the penalty period through 2021, 5 years from 2016?

The question can be clarified by understanding the difference between  Medicaid’s look-back and penalty periods.

When someone gives a gift within the 5-year period before applying for Medicaid, those gifts are added together and will result in a disqualification. The Medicaid applicant will face a period of benefit ineligibility, known as the penalty period.

The penalty is calculated based on the total amount that was transferred or given away and divided by the penalty divisor within the state.  The penalty divisor is the average monthly cost of long-term care in the applicant’s state.  The penalty divisor in New Jersey for 2018 is $423.95 per day or $12,718.5 per month.  Let’s use your example of gifting a total of $60,000; the applicant would be disqualified for approximately 4.7 months.  The penalty period starts to run when someone applies for Medicaid.  Using the five-year lookback, The applicant could wait to apply for Medicaid in 2021 as you suggested and the gifts would not be counted.

Regarding your Irrevocable trust question, you should speak to an Elder Law Attorney for specifics regarding that trust; the Attorney will need to know the type of trust when it was set up, how it was funded, the specific rules outlined in the trust to determine if it is exempt from Medicaid spend down.

>So the bottom line is that once the five years have passed following a particular gift(s), that gift will no longer count when the person who made the gift applies for Medicaid. It is important to note that not all gifts cause the imposition of a penalty.  Gifts between spouses, gifts to disabled children, and gifts to children who have lived with and cared for the Medicaid applicant for a minimum of two years are not subject to the Medicaid gift rule.

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Medicare Part A is hospital insurance and helps cover inpatient hospital stays. If you or your spouse paid Medicare taxes while employed, you are eligible for premium-free Part A benefits.

Part A also covers care received at many other medicare facilities, including inpatient hospital care, long-term care hospital, inpatient rehabilitation facilities, home healthcare, inpatient mental health/psychiatric care and hospice care.

Medicare Part B

Medicare Part B is medical insurance that covers certain necessary services such as a doctors’ visits and outpatient care. It’s optional and requires a monthly premium that varies depending on your income. Enrolling in Part B can be deferred if you or your spouse are still working, but there is a lifetime late-enrollment penalty (10% per year) for not enrolling in Part B when you first gain Medicare eligibility unless you are actively working.

Medicare Part C

Medicare Part C is a form of Medicare benefit offered by private companies. Part C combines Part A, B and sometimes D (prescription drug coverage), and is therefore both medical and hospital insurance.

Part D

Medicare Part D is prescription drug coverage. These Medicare benefits went into effect at the beginning of 2006 to help improve Medicare’s handling of rising prescription drug costs.

Part D plans cover most prescription drugs, but not all. There are certain drugs, like those that must be administered in a doctor’s office, that are covered under Medicare benefits Part B instead. Anyone entitled to Medicare Part A enrolled in Part B also is eligible for Part D.

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http://www.nj.com/business/index.ssf/2017/11/mom_needs_long-term_care_what_to_do_biz_brain.html

My mother lives with me but has dementia and she may soon need to move into a facility. She has only Social Security income. She gave me her savings which is $150,000 so she could help pay her way at my house. I know there is some kind of look-back, and how would that work if she had to go into a home?

When applying for Medicaid, there is a five-year look-back period.  The $150,000 given to you by your mother would be classified as a gift unless it was before the five-year look back.

You mentioned the money was used to pay her way at your house, was there a rental agreement?  Medicaid would want to see a rental agreement and household expenses totaling $150,000.  If less money was spent on the household, it must be paid back and spent towards the cost of her care in a facility.  Keep in mind you cannot go back and add a rental agreement, but you can start now if it hasn’t been done.

If you are a dependent disabled child, your mother would not be subject to the look back.

If none of these situations apply, you can give the money back.  If the money is not given back, your mother would be disqualified from applying for Medicaid for a fixed number of months or would have to pay out of pocket for her care until she has spent the $150,000.

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http://www.nj.com/business/index.ssf/2017/11/what_happens_to_your_house_with_medicaid_biz_brain.html

My mother is gone, and my dad is 91. He needs long-term care but can’t afford it, so I think he has to go on Medicaid. He owns a home worth about $220,000 and only gets Social Security. The only other asset he has is my mom’s jewelry, which we think is worth close to $100,000. Does that count for Medicaid assets? What do we do?

Will your dad be staying at home or moving into a facility for long-term care services?  If he intends to stay home, he can keep the house and qualify for Medicaid.  If he intends to move into a facility more information would be needed, typically only one primary residence is allowed, there are exceptions. In most cases the facility would become his primary residence and the home would have to be sold and funds spent down.

Personal possessions, such as clothing, furniture, and jewelry are typically a  “noncountable asset” that means in most cases it would not be used to determine Medicaid eligibility. You stated the jewelry is worth close to $100,000 there may be exceptions to valuable jewelry under Medicaid rules dependent on which state you reside.

Was the jewelry appraised? Are there public records of the value?   Do you intend to sell it?  The NJ Medicaid application does not ask you to disclose jewelry or the value of it.  However, the Medicaid application does ask you to disclose cash on hand.  If the jewelry is sold or transferred for less than the value, there could be consequences.  These consequences may include spending the cash down on her care, a penalty period assessed by Medicaid or even a denial.

This is a tough decision, If you are uncertain what to do and need further guidance, reach out to an Elder Law Attorney.

Please feel free to give us a call at (973) 325-7500to discuss your personal situation

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http://www.nj.com/business/index.ssf/2018/01/balancing_employer_healthcare_and_medicare.html

I qualify for Medicare next year and I plan to continue working so my wife who is younger than me can have health insurance. But how does it work for me if I have an employer plan and I qualify for Medicare?

Thank you for your question.  My recommendation is to speak with your benefits administrator to make sure you will be able to maintain the group’s plan after turning 65.  Some employer groups require you sign up for Medicare parts A & B and still allow you to maintain group coverage; others will allow you to stay on their plan and maintain status quo.  There are employers that will require you to get off the group plan completely.  If this is the case, you will need to sign up for Medicare Part A & B and add a Medicare Supplement and Part D prescription plan to cover the gaps.

Generally under Medicare rules if you are covered by an employer group with 20 or more employees, you do not have to sign up for Medicare part B; you will have a Special Enrollment Period (SEP).  Medicare beneficiaries who qualify for a Special Enrollment Period can enroll in Medicare Part B without incurring a late-enrollment penalty while they are still employed or their spouse is still employed and up to eight (8) months after they no longer have employer coverage.  For Part D Prescription drug coverage and Medicare Advantage, you will be given a grace period of only 63 days after group coverage ends to sign up.

You may want to sign up for Part A when you first become eligible for Medicare even if you continue working, the reason is that it may offer better coverage for hospitalization than your employer group plan.  Part A is usually free to you but check with your benefits administrator.  If your employer group plan is a high-deductible health plan paired with a health savings account, and if you want to keep contributing to the health savings account (HSA), you should NOT sign up for Part A. The reason is that once you enroll in Medicare, your HSA contributions must stop.

Please call us if you need assistance with Medicare Supplements, Medicare Advantage or Prescription Part D plans. Our number is (973) 325-7500

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