CategoryElder Law

Qualifying for Medicaid | Grand Rapids, Mi Elder Law Attorney

In my last post, I gave a brief overview of what Medicaid is, and what it is not.   The natural follow-up to that is a discussion of Medicaid qualification.  As a Grand Rapids, MI elder law attorney, it is important to point out that this is a VERY general overview. The policy manual for Medicaid is hundreds of pages and the continuing education materials go beyond that. I am just touching the very tip of the iceberg in this post. The policies that govern medicaid are constantly changing. This information is not meant to be used to attempt to qualify, or do pre-planning to qualify, for Medicaid coverage.

Attorney disclaimer out of the way, what does it take to qualify for Medicaid. Generally speaking, an unmarried person is able to have no more than $2,000 in countable assets and less monthly income than is needed to cover the monthly private pay rate at the nursing home. These numbers apply to “countable” assets – a term I talked through briefly in my last post. A married couple is generally allowed to keep a maximum of $120,900 (2017) in countable assets for the benefit of the “community” spouse (the spouse not in the nursing home). This amount is adjusted each year for inflation. In both cases, there is a penalty applied if the applicant or the applicant’s spouse transferred any assets for less than market value within the 60-month period preceding the Medicaid application. That is a key thing to remember. I really can’t remember the last time I met with an individual or couple for Medicaid qualification and they had not given their kids, grandkids or someone else who they cared about some amount of money or an asset (e.g., car, etc.) within 60 months of applying for Medicaid. That can lead to a penalty. Which leads nicely into the topic of Medicaid planning.

My personal definition of Medicaid planning is analyzing the assets and income a person (or couple) has, historical transactions, and developing a plan to structure the ownership and type of their assets and income to either (1) make Medicaid an option, or (2) make Medicaid an option sooner than it would have been without the planning. For many married couples this involves additional (or a complete overhaul of) estate planning documents, planning for how countable assets can/will be converted into non-countable assets when qualification is needed, and properly documenting any divestments and developing ways to cover any penalties that result.

After someone is approved for Medicaid they will usually have a “patient pay amount”. This is the amount of the applicant’s income that he/she must pay to the facility – Medicaid covers the rest. With a married couple, there will also be a “protected spousal amount” and “community spouse income allowance”. The protected spousal amount is the amount that the community spouse is allowed to keep of his/her assets and the applicant spouse’s assets. The community spouse income allowance is the amount of the applicant spouse’s income that the community spouse can transfer to herself/himself on a monthly basis to help supplement his/her income.

On an annual basis, you will need to complete a redetermination application and submit it before each anniversary of the Medicaid approval. This is just like the initial application, but covers only the time frame from the application (or the prior redetermination), and for a couple it applies to only the applicant spouse’s assets and income (after the first redetermination). Upon approval the community spouse and the applicant spouse become separate in the eyes of Medicaid from an asset and income standpoint, even though they were viewed as one for the initial application.

Again, this is a very basic, general overview. I probably covered about 10% of what I deal with in a typical Medicaid qualification or pre-plan. If you have any questions, let me know.

What is Medicaid and Why Does it Matter? | Grand Rapids, Mi Elder Law Attorney

That question really says it all. A big question to many families, and one I hear a lot as a Grand Rapids, Mi elder law attorney – what is Medicaid? Medicaid is a big umbrella, generally designed to make sure that essential healthcare services are available to people without the financial resources to get them. It is NOT Medicare, although many people confuse it with Medicare. Medicare is a government program providing certain healthcare coverage to all people over 65 years old (as well as certain younger people with disabilities). For purposes of this post, I will focus on what many refer to as skilled nursing Medicaid. This encompasses three main programs: Medicaid assistance to persons in Medicaid-certified nursing homes, MI Choice Waiver Program (Waiver), and the Program of All Inclusive Care for the Elderly (PACE). The last two provide Medicaid assistance to people who need long-term care services and meet the nursing home level-of-care requirement, but who elect to receive that care in the community (e.g., not in a nursing home).

The main confusion to many is between Medicare and Medicaid. They are different, as you can see from the explanation above. The next misconception out there is that you have to put yourself into poverty to qualify – that you have to spend everything you have until almost nothing is left. It is very true that there are income and asset limits on qualifying for Medicaid. For 2017, the asset limit for a single individual is $2,000 in countable assets, and for a couple is $120,900 in countable assets. The numbers vary on the income side, depending on the program for which you are trying to qualify. The key thing to remember on asset limits is that the number is based on “countable” assets. Not all assets are “countable”. This is a key part of Medicaid planning.

So what is a countable asset? Quite simply, it is an asset that the Department of Health and Human Services (DHHS) will count when adding up the value of your assets. Or, said another way, it is all assets of any kind that are not excluded assets (e.g., non-countable assets). Very generally speaking, the only non-countable assets are: your homestead, household and personal goods, a vehicle, a very small amount of life insurance (this one requires a very detailed review of the policy itself), and certain types of burial and funeral arrangements (not all such arrangements are excluded).

That is just a brief overview of what Medicaid is (and what it is not). You will see all sorts of different approaches and planning philosophies out there when it comes to Medicaid and Medicaid planning. My personal viewpoint is if you can afford to pay for your own care, you should want to.  If for no other reason than you tend to have more choices when you do.

Make sure to be watching for Part 2 of my “what is Medicaid” series.  It should be posted in the next few weeks.

Growing Issues with Elder Financial Abuse

I just wanted to write a quick blog post on the topic of elder financial abuse, as we are seeing a rise in these cases.  I have to admit that I am shocked at how some “friends” and even family take advantage of the more experienced generations.  Many times, the elder is taken advantage of by someone they trust.  And it is quite common to see the elder suffering from some level of cognitive impairment, such as alzheimer’s or dementia.  To get some basic information on what to look out for, take a look at these two sites: http://www.preventelderabuse.org/elderabuse/fin_abuse.html and
http://www.consumerreports.org/cro/magazine/2013/01/protecting-mom-dad-s-money/index.htm

As I mentioned, we are helping several families right now with holding responsible the scammers who took advantage of their older family member and recovering what we can of the financial losses.  Look for a follow-up blog post on the topic in the future.  In the meantime, if you or someone you know has an “older” friend or family member who they suspect may be a victim of elder financial abuse, please contact me.