Medicaid and Eldercare
Generally, after an individual has used up all of their resources, Medicaid will step in to provide the ongoing care of the individual. Medicaid is usually a combined Federal and state program that pays for health and long-term care for eligible low-income citizens and legal residents of the United States.
It is not practical to explain all of the various states programs. However, since they are generally combined Federal and state programs, there are similarities among the various programs. This article provides a brief overview of one state's program. A Directory of State sites allows you to review the rules for any particular state.
California's version of Medicaid is referred to as Medi-Cal and the following is an overview of the program's qualifications:
QUALIFYING FOR NURSING HOME STAY - In order for Medi-Cal to pay for a nursing home stay, the patient:
- Must be admitted on a doctor's order,
- The stay must be medically necessary, and
- With incomes from any source are allowed to keep only $35 per month for personal needs. Patients with no income receive an SSI grant of $40 per month for their Personal Needs Allowance (PNA).
- Patients who own their own home - Medi-Cal recipients in nursing homes who own their own homes (which may be multiple dwelling units) remain eligible for Medi-Cal as long as:
- a. They intend to return home; or
- b. The residence is used by a spouse and/or dependent relatives; or
- c. The residence is used by a sibling or adult child who lived there at least one year before the owner entered the nursing home; or
- d. They make a good faith effort to sell the home. Persons not capable of making a good faith effort to sell (for instance, those who need conservatorships) remain eligible for Medi-Cal. In that case, bona fide steps have to be taken so that someone else can sell the home.
- a. They intend to return home; or
- Married Couples - Couples do not have to spend all their resources in order for one spouse to be eligible for Medi-Cal coverage in a nursing facility. The person going into the nursing facility can transfer his or her interest in the home to the spouse remaining at home without affecting Medi-Cal eligibility. A couple also may divide its non-exempt property, so that the spouse at home may keep up to $2,739* a month of the couple's income and up to $113,640* of the other assets for his/her needs. The spouse at home may also keep any independent income. A couple may divide their property however they wish. In determining eligibility under the spousal impoverishment provisions, Medi-Cal counts the property held in the name of either or both spouses. As soon as the countable non-exempt property is below $113,640* ($2,000 which can be retained by the institutionalized spouse), the county can establish initial eligibility. The couple then has at least 90 days to transfer everything but $2,000 into the name of the non-institutionalized spouse. The non-institutionalized spouse may retain all of the income that he or she receives in his or her own name. Consult legal services or a private attorney familiar with Medi-Cal law if either you or your spouse may need nursing facility care.
FINANCING NURSING HOME CARE - Generally, a nursing facility's administration will help determine if the patient is eligible for Medi-Cal to pay the costs of the nursing home. If not, they can explain under what conditions the patient may become eligible in the future. The law requires that nursing home residents receive identical treatment regarding transfer, discharge, and provision of services regardless of the source of payment. A Medi-Cal resident can stay in any bed in a nursing facility.
Spousal Impoverishment Provision - Couples looking at nursing home placement for a spouse need to be aware of the special laws enacted that allow the spouse remaining at home to keep a certain amount of income and resources when the other spouse enters a nursing home. This is intended to prevent impoverishment of the spouse at home.
- Community spouse's monthly maintenance needs allowance: The spouse at home may keep all of the couple's income up to $2,739* per month. This is called the community spouse's "monthly maintenance needs allowance". Note: This amount is adjusted annually by a cost of living increase. The spouse at home may obtain additional income or resources through a "fair hearing", or by court order. If the spouse at home receives income above the limit in his/her name only, he/she can keep it all (this is called the "name on the instrument rule"); however, he/she will not be allowed to keep any of the nursing facility spouse's income. Income received by the nursing facility spouse will go to his/her share of cost. The spouse in the nursing home is allowed to keep $35 monthly for personal needs ("personal needs allowance").
- Resources: The spouse at home can keep up to $113,640* in resources, and the institutionalized spouse may keep up to $2,000. (Different laws apply to spouses who entered a nursing facility before September 30, 1989. If this is the case, the individual should contact a lawyer/advocate knowledgeable about this area of the law.) Both separate property (i.e., from a previous marriage or inheritance) and community property that is not exempt are combined and counted at the time of application for Medi-Cal. Once the resource limit has been reached, all ownership interest should be transferred to the spouse at home. The institutionalized spouse's $2,000 resource limit should be kept separately and accounted for separately.
*The values are periodically adjusted for inflation. The amounts listed were effective 1/1/2012.
TRANSFER OF ASSETS - Institutionalized Medi-Cal recipients or applicants who transfer non-exempt assets for less than fair market value during a 36-month "look back" period may be subject to a period of ineligibility. The length of the ineligibility period depends on the value of the transferred asset or resource and date of transfer period. The period of ineligibility begins on the date the transfer was made. The 36-month "look back" period begins when an institutionalized person applies for Medi-Cal or when a Medi-Cal recipient is admitted to a nursing facility. A 60-month "look back" period for assets from certain trusts is also required. Federal law amended trust regulations makes it more difficult to set up a Medicaid qualifying trust for eligibility and estate claims purposes. For a trust already established, it is recommended that an attorney review it.