As we live longer, the probability of utilizing an assisted living facility or a nursing home to live out the last months or years of our lives increases. We are fortunate in Tuscarawas County that we have a number of great options for both assisted living and full care nursing facilities. If you or a loved one are in need of such a facility, I suggest you contact these facilities, speak with their administrators, schedule a tour, and even speak with some of the residents if possible. Also, make sure to ask if the facility has an assisted living program and if they accept Medicaid. During this same time, it is important to develop a strategy of how you are going to pay for this type of care. Thus, it is important to know what the rules are and what options you have regarding paying for these facilities. This article will explain those rules and discuss those options.
The average cost for skilled nursing home care in Ohio is $6,327 per month. This is the number the State of Ohio uses in their Medicaid calculations. Generally, the cost for assisted living is normally between $3,000 and $5,000 depending on the type of care needed. Other than using Medicare for rehab stays, two main options exist for paying this cost for a more permanent stay: (1) private pay and (2) qualifying for the Medicaid program. The simplest way is to privately pay until the individual has less than $1,500 of assets remaining. At that point, the individual will apply for and be qualified for Medicaid assistance. However, not all assets need to be spent on the monthly nursing home costs in order to qualify for Medicaid. This is especially true for married couples where one individual is in a nursing home and the other individual is living at home. In those cases, the spouse at home can keep significantly more than $1,500 and still allow the nursing home spouse to qualify for Medicaid. Therefore, you need to be aware that planning can be done to save assets and still eventually qualify for Medicaid.
When private paying, normally an individual utilizes monthly income such as social security, pensions, and investments to pay the cost and fills in the difference by using savings or liquidating investments. If you are a veteran, you may also be able to obtain a Veteran’s benefit called Aid in Attendance which we have discussed in previous articles. We are also seeing a lot of assets in a Medicaid Pooled Trust being used to pay for this care.
Four components must be examined and satisfied in order to qualify for Medicaid. Those components are the medical component, the income component, the resource component, and the penalty period component.
In order for an individual to be eligible for Medicaid from a medical standpoint, the care must be medically necessary. Medical eligibility for nursing facility services is determined based on a comprehensive needs assessment which demonstrates that the recipient requires nursing home services. Nursing home residents are dependent on others in several activities of daily living such as walking and standing by oneself, feeding oneself, dressing oneself, bathing oneself, toileting, and continence. Each separate activity of daily living may be classified as either independent (requiring some assistance) or being totally dependent. In order to qualify under the medical portion of the Medicaid test, an individual must need hands-on assistance with 2 out of 6 of the activities of daily living.
With regards to the income test, if countable income is less than the nursing home costs, the nursing home patient would meet the income test.
For the asset portion of the test, as a general rule, Medicaid will not begin to pay nursing home bills until the assets of the nursing home resident are below $1,500. However, certain assets are excluded for purposes of determining Medicaid eligibility. The exempt assets for a single individual include irrevocable prepaid burial contracts, one automobile, and household and personal effects. For married individuals, these exempt assets also include an individual’s home if the nursing home resident’s spouse(“community spouse”) is residing in that home. In addition, for married individuals, a nursing home resident’s spouse may keep one-half of all non-exempt assets up to a maximum of $119,220 and a minimum of at least $23,844. This amount is determined by adding up the value of all non-exempt assets on the first day one spouse is institutionalized for a period of 30 consecutive days. It does not matter which spouse owns the asset. All assets are included in this calculation.
In addition, there is a 5 year look-back period for all transfers. This means that on the date of application for Medicaid benefits if there have been any transfers made to an individual(other than the community spouse) or to a trust within the previous 5 years, a penalty period will be imposed even if the applicant would otherwise qualify for Medicaid benefits. This penalty period begins when the person enters a nursing home, a Medicaid application has been filed, and the person would otherwise be eligible for Medicaid benefits. For example, if an individual had given away $63,000 of assets within the last 5 years, then there would be a penalty period of 10 months from the time the individual entered the nursing home and was otherwise qualified for Medicaid benefits.
The Medicaid qualification process can be very confusing. I have seen numerous situations where single individuals and married couples have spent their entire life savings, including the proceeds from the sale of their residence, because they were not aware that certain assets are exempt or that a community spouse can generally keep one-half of the non-exempt assets or that there are various planning options available to preserve assets.
If you are anticipating moving to an assisted living facility or have a loved one who is moving to an assisted living or nursing home facility, please make sure to contact a qualified elder law attorney to educate you on the rules and help you develop a plan on how you will pay for this care.
NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.
James F. Contini II, Esq.
Certified Specialist in Estate Planning,
Trust & Probate Law by the OSBA
Krugliak, Wilkins, Griffiths & Dougherty Co., LPA
158 N. Broadway
New Philadelphia, Ohio 44663