Being sole caregiver of my parents, both diagnosed with Alzheimer’s at the same time presented me with many challenges. In the beginning of my care giving for them I knew it was imperative that I obtain a better understanding of not only their heath care needs, but also long term care. One of my concerns at the time would be whether my parents would qualify for Medicaid to pay for long term care at some point in the future, because I knew with the high cost of Assisted Living Homes, that their monies would eventually run out. I was also aware that neither Medicare nor Medicaid paid for assisted living except in very limited situations. It was apparent to me that my mother was progressing rapidly in the disease process and would require the level of care that can be provided only at a licensed nursing home.

In the United States, for the most part, people must pay for their own long-term care until they run out of money. Then, Medicaid, a joint federal-state welfare program for medical expenses, may pay for the patient who is receiving care in a nursing home, or occasionally at home, if all Medicaid criteria are met. Federal law sets many Medicaid eligibility regulations, but each state has certain flexibility to establish individual Medicaid rules. The result is that no two states have exactly the same rules for Medicaid eligibility.

Medicare, the health insurance plan for persons receiving Social Security benefits, pays for little nursing home care. Medicare pays only for skilled care, and pays in full for only 20 days and partially for up to 100 days of skilled nursing care following a hospitalization. Medicare does not pay for long term care in a nursing home.

Medicaid will pay for long term care in a nursing home. It also will pay for some in-home assistance under the community based case waiver programs. Medicaid will not pay for assisted living.

The basic rule of Medicaid eligibility is that an applicant may not have more than $2,000 in “countable” assets in his or her name. For a married couple both applying for Medicaid, they can have a total of $3,000 in countable assets. “Countable” assets include all belongings accept for: 1) personal possessions, such as clothing, furniture and jewelry; 2) one motor vehicle each, regardless of value; 3) the applicant’s residence if a spouse, minor child or disabled child of any age lives in it, and 4) certain burial funds for each spouse.

All Medicaid resource eligibility calculations are based on the assets both a husband and wife hold on the first day of the month in which one spouse becomes institutionalized. That date is the day on which he or she has been in a hospital for 30 days or the day he or she enters a long-term care facility. All countable assets are included, regardless of whether they are in joint names or in the husband’s or wife’s separate name. In effect the Medicaid eligibility worker takes a “snapshot” of what is owned on that date and refers to it later when application is made for Medicaid.

Resources owned in the name of one or both spouses (or titled in any trust) are considered available regardless of whether either spouse agrees to sell or liquidate the resource, and regardless of whether either spouse refuses to make the resource available.

Where an applicant for Medicaid is married, his or her spouse – known under the Medicaid rules as the “community” spouse – is permitted to keep half of the couple’s combined holdings on the date of institutionalization, up to a cap of $101,640. There also is a floor of $20,328. These numbers are adjusted each January for inflation. Non-countable resources, such as the family home if the community spouse lives there and one motor vehicle are not included in determining Medicaid eligibility.

An example below demonstrates how this works:

If the couple had $250,000 in countable assets on the date of institutionalization, the community spouse’s resource allowance would be $101,640 and the nursing home spouse would be required to spend all, but $2000 of his or her remaining $146,360.

……to be continued (Income Eligibility Determination, Spousal Income Protection, Spend Down, Penalty Period, Transfer Penalty “Look back” Period, Exceptions, Expenditure of Institutionalized Spouse’s Income, Community Based Care)