Understanding Medicaid Rules

Understanding Medicaid RulesYour parent’s assets are dwindling after several years in assisted living. Now you are worried: How can my parent continue living in the place he or she calls home? Medicaid is the national social safety net that can be used for long-term care for low-income individuals, but there are rules, regulations, and eligibility requirements you should know.

Eligibility Rules

While Medicare is a federal program, it is administered individually by each state, meaning that your eligibility will be impacted by the state in which you are located. However, federal law does require states to provide certain services to those eligible for Medicaid, including long-term care in skilled nursing facilities.

According to federal eligibility requirements, seniors can only use Medicaid for long-term care if they have already exhausted their own assets. Any assets you transferred within the last five years—even if you considered this transfer as a gift—will make you ineligible for Medicaid based on the so-called “transfer penalty.” Similarly, spending money on large purchases will come under scrutiny as part of your application for Medicaid benefits.

In some cases, the senior’s home will not count as an asset that discounts eligibility for Medicaid. One such circumstance is if the individual’s spouse who co-owns the home is still living there. Additionally, the individual may transfer their home to certain individuals, including a child under the age of 21, or a child who has lived in the home for at least two years as a caregiver preceding the parent’s move into a nursing home. (More about management of your assets and how that may affect your Medicaid eligibility is available at SeniorAdvisor.com.)

What is Covered?

Medicaid will cover long-term nursing home care. There are Medicaid-certified nursing homes offering Nursing Facility Services that primarily fall into three categories: skilled nursing, which includes medical care and related services; rehabilitation, which is needed in the event of injury, disability, or illness; and long-term care, health-related care and services needed regularly due to a mental or physical condition.

Nursing facility services are required by law to be provided by state Medicaid programs for anyone over the age of 21 who needs them. A skill nursing facility that accepts Medicaid patients cannot evict a resident who has paid for care privately and then, when those funds are depleted, is accepted into the Medicaid program.

Whether Medicaid can be used for assisted living varies by state. Some states have waivers are programs that will allow Medicaid funds go toward assisted living expenses. In some cases, Medicaid covers personal care of nursing services regardless of the individual’s residence—i.e., a private home or assisted living community. However, in some states the personal care cannot be provided in a nursing home. The website Paying for Senior Care provides an excellent state-by-state breakdown of the availability and eligibility benefits for all 50 states.

The best advice regarding concerns about Medicaid eligibility is to plan ahead so you know your options before the situation becomes urgent. Before moving into a senior living community, find out if it accepts Medicaid. If so, will this require a change in your living arrangements? For instance, a CCRC may accept Medicaid payments for residents living in the skilled nursing home section but not in assisted living or independent living.

Seek the advice of an eldercare lawyer to ensure that your parent is handling assets properly, including questions about gifting of assets, in order to not inadvertently be shut out of potential Medicaid benefits in the event that they are someday needed.

CHIME IN: What has your family’s experience been with Medicaid eligibility for long-term care?

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