Nursing Home Medicaid is the most comprehensive level of Medicaid coverage and includes all Medicaid services. Someone who qualifies for Nursing Home Medicaid will have coverage for everything covered by Community Medicaid and Community Medicaid with Long-Term Care in addition to Nursing Home coverage. This includes standard healthcare services such as doctor visits, hospital stays, lab tests, and prescription drugs, as well as community based long-term care services such as home care, adult day care, and assisted living (see Community Medicaid for a more complete outline).
Medicaid will look at two financial categories when assessing an applicant’s eligibility – income and resources. Income is any money that is coming in on a timely basis such as Social Security, a pension, or an IRA that is in distribution. Resources are any assets that the applicant has such as savings, stocks, bonds, real estate, or an IRA that is not in distribution.
There is a $50/month income allowance for nursing home residents. All other income must be paid to the nursing home towards the cost of care. Unlike Community Medicaid and Community Medicaid with Long-Term Care, a nursing home resident cannot shelter excess income in a pooled income trust to qualify for Medicaid.
The resource limit for nursing home residents in New York State is $14,850. Excess resources must first be spent-down before an applicant can qualify for coverage. It is often advisable for an applicant with excess resources to seek assistance from an elder law attorney who may be able to assist them in salvaging a significant portion of their assets.
Medicaid understands that people may seek to gift away their assets in order to qualify for coverage without spending down. To counter this, Nursing Home Medicaid has a five year look-back period for uncompensated transfers (gifts). If Medicaid discovers a transfer of this nature, they will assess a penalty against the applicant.
The penalty is assessed as follows:
Medicaid has monthly “regional rates” which it uses to calculate the penalty. These rates vary by county and are subject to change from year to year. Medicaid divides the total amount transferred by the monthly regional rate to determine the number of months the applicant will be penalized. Medicaid will not pay for care during the penalty period. Rather, the applicant will have to pay privately for any nursing home care received in that time.
The following is an example:
In 2015, the monthly regional rate in NYC is $11,843. If a NYC applicant gifted $125,000 three years prior to applying for Nursing Home Medicaid (i.e. within the five year look-back period), Medicaid will divide $125,000 by $11,843 to determine a penalty of 10.6 months.
The home of a nursing home resident is exempt if the resident’s equity is within $828,000 and the resident has intent to return home. This intent is subjective to the nursing home resident. However, there still exists the possibility of the state looking to recover from the property after the death of the nursing home resident for services it has paid out. Additionally, the state may place a lien on the property even during the life of the resident if he is permanently absent and not reasonably expected to be discharged. A lien may not be imposed if the resident’s spouse resides there.
When someone goes into a nursing home and his spouse remains in the community, the community spouse is entitled to an income and resource allowance. The income allowance for the community spouse is up to $2,890.50 of the couple’s combined income. The resource allowance is $74,820 or one-half of the couple’s total resources up to $119,220.
The following are some common exempt income and resources:
Money being paid toward health insurance premiums is not counted when Medicaid budgets an applicant’s income.
Holocaust restitution payments exempt income and are not counted when Medicaid budgets an applicant’s income. Holocaust restitution payments are also exempt resources. This means that even if someone has been receiving payments for decades, if he can document the total amount of payments received, he may keep that entire sum and still qualify for Medicaid. Holocaust restitution payments are also not counted against the community spouse’s allowances.
Please note: This article contains general information and does not cover more advanced techniques such using promissory notes to protect assets and spousal refusal.