It is important to understand how Medicaid counts your resources | Characteristics

While the Medicaid system may be a generally recognized public benefit, the intricacies of the program generally only become relevant to individuals when faced with the need to use it. For the elderly and their families, this moment usually arises when discussing the need for nursing home care.

Medicaid is available to people who meet certain income and asset limits and is a common form of payment in nursing homes to pay for long-term care. This should not be confused with Medicare, which may pay for rehabilitation services, but does not cover long term care.

Eligibility for Medicaid for long term care is based on an individual’s income and assets. The income is used to determine if the person can afford to pay for monthly care without assistance. If unable to pay in full, the individual will have to pay almost all of their income for the bill, with Medicaid covering the rest. Assets are counted to determine whether the person has the non-income resources to pay for their care.

Married couples are treated somewhat differently from individuals in several ways. The assets of a married couple are counted in total, whether the couple owns assets jointly or individually. The assets are then divided, with each spouse considered to own “half” of the assets only for calculation purposes – not an actual division. Second, married couples get additional exemptions on assets.

Not all resources are considered “countable” for Medicaid purposes. For example, prepaid funeral expenses, a car used to transport institutionalized and qualified individual retirement accounts may be exempt from Medicaid’s accounting asset limits.

For married couples, the main residence used for a community spouse (the spouse still at home), as well as a large sum of liquid assets, are also excluded. Many non-accounting assets are very specific to the individual situation or current events. For example, stimulus checks were exempt assets, but only for a limited time.

Determining assets can quickly become confusing as asset values ​​fluctuate on a daily basis. For this reason, Medicaid must have a specific date to determine asset balances. This date is called the “snapshot date”.

Due to the snapshot date, single and married applicants are again treated differently. For unmarried individuals, all asset protections and expense reductions must be completed before submitting the Medicaid application. A detailed explanation should be included, especially to explain any transfer of resources over the past five years.

However, for married applicants, in most cases, a means-tested request must first be submitted to the Medicaid office before further action is taken. This document details all of the resources that Medicaid will count and specifies exactly how much of those resources must be “spent” by the institutionalized spouse to be eligible. This number can then be used to preserve assets in the most beneficial way for the couple.

In many cases, the assets are fully preserved by turning the accounting asset into a non-accounting income stream for the spouse staying at home.

The means test is a great tool that serves as a guaranteed instant date for married couples and to ensure that all expenses are properly credited.

Once the expense reduction is complete, a complete Medicaid application is filed, with proof of the expense reduction. If you do not request a means test, the Medicaid office may count the total (reduced) asset value and require a second reduction on the remaining half.

Navigating Medicaid can be a complicated process and should be started immediately as soon as a person enters a facility. Understanding the options in advance can ensure that the property is preserved, especially for a spouse still at home.

Cynthia Griffin is an elder law and estate planning lawyer with Burnett and Griffin PLLC in Elizabethtown. She can be reached at [email protected]

Cynthia Griffin is an elder law and estate planning lawyer with Burnett and Griffin PLLC in Elizabethtown. She can be reached at [email protected]

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