Medicaid and Long-Term Care

If you have questions, or feel you need legal advice about Medicaid rules contact your Area Agency on Aging (AAA) for a referral to an Elder Law attorney. Answers on Aging: 970.498.6802(will change to 211 in early 2003). Outside of Larimer County call the Eldercare Locator at 1-800-677-1116 to contact the AAA nearest you.

Qualifying for Medicaid for Long Term Care The applicant must:

• Be continuously institutionalized (in either a hospital or a nursing facility) for a period of at least thirty days. (If all other Medicaid eligibility criteria have been met, Medicaid benefits are retroactive to the first day of institutionalization).
• Have medical needs requiring the institutionalization (nursing facility, hospitalization or Medicaid-certified assisted living).
• Be 65 or older, or otherwise meet the Supplemental Security Income (SSI) definition of disability or blindness.
• Be an U.S. Citizen or a resident alien with documented legal authority for his or her residency.

Income requirements. To qualify for Medicaid, the applicant’s gross monthly income cannot exceed a certain dollar amount which changes annually. If the applicant’s income is greater than the Medicaid income cap, but less than the average monthly cost of nursing homes in the region, state law permits the creation of an income trust.

Resource requirements. The resource cap for Medicaid eligibility is $2,000 for an individual and $3,000 for a couple. Assets are considered either countable (non-exempt), or exempt. Exempt resources are not counted in determining Medicaid eligibility. Some examples of exempt resources include:

• The personal residence of the applicant.
• One motor vehicle that does not exceed $4,500 in value.
• Personal property up to $2,000.
• Wedding and engagement rings.
• Required medical equipment of any value.
• Term life insurance and whole life insurance with a face value of less than $1,500.
• Burial spaces and irrevocable funeral and burial/cremation plans. If the funeral plan is irrevocable, any amount can be spent. If revocable, the maximum exempt amount is $1,500 with any amount more than that counted for purposes of resource eligibility.

Non-exempt or countable resources include:

• Second homes, other real estate.
• Second cars.
• Stocks, bonds, and other securities.
• IRA's of the institutionalized spouse.
• CD's, money market funds.
• The cash value of life insurance with a face value in excess of $1,500.

Transfer of assets. Transferring or gifting of assets by a potential Medicaid applicant to others without receiving something in return may jeopardize an applicant’s eligibility. Currently, if a transfer was made after August 10, 1993 and within 36 months (3 years) before the date of application for Medicaid, the transfer is presumed to have been made to qualify for Medicaid. The thirty-six month "look-back" period (sixty-months for trusts), is counted from the date of application for Medicaid to determine if any transfers were made during that time for less than "fair consideration." If transfers were made, the Medicaid applicant will be penalized, meaning that he or she will not be eligible for Medicaid, for a number of months depending on the value of the assets transferred and the number of months that have passed since the date of transfer. There are some exceptions to the transfer rules

Estate recovery program. Under the Federal Estate Recovery Program, the state can seek reimbursement for Medicaid expenses paid to care for the Medicaid recipient by placing a lien against the home owned by the recipient or by filing a claim against the probate estate of the Medicaid recipient. The state cannot act on the lien against the home or recover from the probate estate if there is a surviving spouse who continues to live in the house. If, however, the surviving spouse no longer lives in the home or if she/he dies before the spouse who is receiving Medicaid assistance, the state can attempt to recover Medicaid costs from the estate. There are legal ways to avoid estate recovery. If you need specific information, contact your estate planning or Elder Law attorney for advice.

Spousal protection program. Spousal impoverishment laws enacted by Congress in 1988 are designed to make sure that the spouse who remains at home, when the other spouse is placed in a nursing facility, has enough income and resources to live on. The spousal protection law includes the following income and resource provisions.

Income Provisions. Under the law, the CS is guaranteed a minimum monthly income or "allowance," called the "Minimum Monthly Maintenance Needs Allowance" whci changes annually.

The Community Spouse Resource Allowance (CSRA) is the amount the spouse remaining at home can keep while still allowing the spouse who needs nursing home care to qualify for Medicaid. The CSRA changes annually.

For more information consult an Elder Law attorney or your local Medical Assistance office. To apply in Larimer County contact:

Larimer County Department of Human Services, Senior & Disabled Programs
1629 Blue Spruce Dr.
Suite 209
Fort Collins CO 80524
(970) 498-6800
(970) 498-6455 Fax
http://www.co.larimer.co.us/seniors/index.htm

Information courtesy of Elizabeth A. Kelly, Attorney/Mediator and Bill Beyers, Attorney at Law, Elder Care Network Participants. The information contained on this website is NOT a substitute for legal advice and no representations are made as to the accuracy of this information.