FAQ About Medicaid for Long-Term Care
Note: Medicaid regulations vary from state to state. This information is based on regulations in Pennsylvania. In PA, the Medicaid program is also known as Medical Assistance.
Medicare is health insurance and covers medical services such as physician appointments, therapy, blood tests, x rays, medical procedures and hospitalization. Medicare will sometime pay for rehabilitation in a long-term care facility for a period of 20 to 100 days, but not longer. In long-term care, Medicaid covers the cost of ongoing support services for daily functioning, such as room and board in a nursing home.
Generally financial eligibility for Medicaid services in the community (waiver programs) requires that an individual’s income level be not more than $2,313/month in 2019 (which increases annually to equal three times the poverty level). Financial eligibility for care in a facility is based on assets as well as income. Each program also has eligibility requirements related to an applicant’s actual need for care.
Medicaid is a federal program that is overseen by the Center for Medicare and Medicaid Services (CMS). In Pennsylvania, Medicaid is called Medical Assistance and is administered by the Department of Human Services (DHS).
In Pennsylvania, Medicaid funds are not available to pay for assisted living or personal care.
For Medicaid to pay for care in a nursing home, an individual recipient must be determined to need a nursing home level of care by a physician and the local Office of Aging. An individual whose income is not greater than three times the poverty level may keep up to $8,000 of total resources, but may otherwise keep only $2,400. The cash value of life insurance counts as a resource, but one car and a residential home does not count as a resource.
The criteria are the same for the applicant for Medicaid. However, excess resources may be transferred to a spouse, who is usually entitled to keep 50% of resources up to a maximum amount ($126, 420 in 2019). There is no maximum on a spouse’s income. An attorney who is experienced with Medicaid rules pertaining to long-term care can help to protect excess resources by converting them into allowable income for the spouse.
Yes, all of these types of assets are included when calculating eligibility. One exception is an IRA which is owned by a spouse living in the community. Prenuptial agreements do not help to protect additional resources.
Yes, tools are available which help accelerate Medicaid eligibility and preserve assets. The assistance of an elder law attorney is recommended for this “spend-down” process.
The Department of Human Services will review an individual’s financial information for the 60 months (5 years) preceding the date of a Medicaid application. They are looking for transfers of assets in an amount of $500 or more in any one month to another person or trust without payment of just compensation, such as for providing services per terms of a written contract. Uncompensated transfers are known as “gifts.” Gifts are not illegal in the sense of causing a criminal charge against the Medicaid applicant or gift recipient, but they do create a significant penalty which may cause personal liability for the applicant’s children.
If an individual has transferred assets during the look-back period, an episode of ineligibility may occur unless that transfer can be offset by the analysis and strategy of an attorney who is knowledgeable about how DHS administers the Medicaid funds.
If a nursing home resident is not a millionaire, then a family should begin consideration of Medicaid immediately.
Effective October 1, 2020: important numbers to qualify for medical assistance for long-term care:
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REGISTER HERE for LONG-TERM CARE PLANNINGPower of Attorney
A Power of Attorney can be used to give another person the right to sell a car, home, or other property in the place of the maker of the Power of Attorney. A Power of Attorney might be used to allow another person to sign a contract for the maker of the Power of Attorney (the person who makes a power of attorney is called the “principal”). It can be used to give another person the authority to make health care decisions, do financial transactions, or sign legal documents that the principal cannot do for one reason or another. With few exceptions, Powers of Attorney can give others the right to do any legal acts that the makers of the Powers of Attorney could do them themselves. A General Power of Attorney gives the “power of attorney Agent” or simply “Agent” (the legal name of the person who is authorized to act for the principal) very broad powers to do almost every legal act that the principal can do. When Elder Law Attorneys draft general Powers of Attorney, they still list the types of things the Agent can do but these powers are very broad. People often do general Powers of Attorney to plan ahead for the day when they may not be able to take care of things themselves. By doing the General Power of Attorney, they designate someone who can do these things for them.
Normal Powers of Attorney terminate if and when the principal becomes incompetent. Yet many people do Powers of Attorney for the sole purpose of designating someone else to act for them if they cannot act for themselves. It is precisely when persons can no longer do for themselves that a Power of Attorney is most valuable. To remedy this inconsistency, the law created a Durable Power of Attorney that remains effective even if a person becomes incompetent. The only thing that distinguishes a Durable Power of Attorney from a regular Power of Attorney is special wording that states that the power survives the principal’s incapacity. Even a Durable Power of Attorney, however, may be terminated under certain circumstances if court proceedings are filed. Most Powers of Attorney done today are durable.
Yes. At the time the Power of Attorney is signed, the principal must be capable of understanding the document. Although a Power of Attorney is still valid if and when a person becomes incompetent, the principal must understand what he or she is signing at the moment of execution. That means a person can be suffering from dementia or Alzheimer’s Disease or be otherwise incompetent sometimes but as long as they have a lucid moment and are competent at the moment they sign the Power of Attorney, it is valid even if they do not remember signing it at a later date. At the time it is signed, the principal must know what the Power of Attorney does, whom they are giving the Power of Attorney to, and what property may be affected by the Power of Attorney.
Any competent person eighteen years of age and older can serve as an agent. Certain financial institutions can also serve. There is no course of education that agent must complete or any test that Agent must pass. Because a Power of Attorney is such a potentially powerful document, agents should be chosen for reliability and trustworthiness. In the wrong hands, a Power of Attorney can be a license to steal. It can be a big responsibility to serve as an agent.
For Medicaid
Medicare is health insurance and covers medical services such as physician appointments, therapy, blood tests, x rays, medical procedures and hospitalization. Medicare will sometime pay for rehabilitation in a long-term care facility for a period of 20 to 100 days, but not longer. In long-term care, Medicaid covers the cost of ongoing support services for daily functioning, such as room and board in a nursing home.
Medicaid is a federal program that is overseen by the Center for Medicare and Medicaid Services (CMS). In Pennsylvania, Medicaid is called Medical Assistance and is administered by the Department of Human Services (DHS).
In Pennsylvania, Medicaid funds are not available to pay for assisted living or personal care.
For Medicaid to pay for care in a nursing home, an individual recipient must be determined to need a nursing home level of care by a physician and the local Office of Aging. An individual whose income is not greater than three times the poverty level may keep up to $8,000 of total resources, but may otherwise keep only $2,400. The cash value of life insurance counts as a resource, but one car and a residential home does not count as a resource.
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