Medicaid is a joint federal and state program that provides health coverage for certain eligible persons who have low incomes and minimal assets. Medicaid is not to be confused with Medicare which is an entitlement program for those aged 65 or over, those on disability, or those with kidney failure, among other things. Medicare is something you become entitled to because you or a spouse paid for it through taxes by Social Security. Medicaid, on the other hand, is not an entitlement program, and instead you must meet exact eligibility guidelines.
Medicaid eligibility is different for each state so it’s important that you check with a professional that is familiar with the laws and regulations of your specific state. Specifically, eligibility for Medicaid is determined at the state level and it is mainly based on your income and the amount of assets you own. The income requirements for Medicaid are determined by the MAGI (Modified Adjusted Gross Income) and the exact income limit will be based on factors such as the size of your household.
In addition to income limits, there are also caps on the value of assets that someone may have to be eligible for Medicaid. While the specifics may vary from state to state, this countable asset cap is usually around $2,000. However, there are assets that may be exempt from being counted towards this cap. Assets that may be exempt could include your family home, your automobile, life insurance, among other things.
There are other specific provisions that may allow the spouse of a nursing home resident to retain about one half of the couple’s joint assets from being counted toward the asset limit for Medicaid. This situation typically arises when one spouse is applying for Medicaid and the other spouse is relatively healthy. This is called the “Community Spouse Resource Allowance” and there are very specific requirements that need to be met. As such, it’s important to discuss this possibility with a professional, such as a professional Medicaid Planner.
An important consideration to keep in mind when applying for Medicaid is that there is a “look back” period. In most states, except California, the look back period is five years. This means that Medicaid will “look back” five years from the date of your Medicaid application to make sure that you didn’t sell or give away assets for less than their fair market value. This “look back” period is meant to ensure that people don’t give away assets to their friends and relatives just to get under the Medicaid asset limits.
If you or someone you love needs assistance with Elder Care law issues, call 856-281-3131. Let us help ease your stress and give you a plan.