Medicaid Long-Term Care- What is it? And How Can You Qualify?

State Medicaid-Long-Term Care (LTC) programs can provide care in a private home, a nursing home, an assisted living facility or a continuing care retirement community. Medicaid Long-Term Care remains the largest source of funding for nursing home care for individuals throughout the country. So, why does is still remain a mystery to many people?

No, matter how care is received either in-home or in a nursing facility, the costs are expensive. Often times family members are tasked with being the caregivers of their parents and or grandparents. Many family caregivers and seniors assume these costs would be paid for by Medicare & Medicaid. But, what most people find out when they apply for Medicaid LTC benefits is that they meet the medical requirements, but do not meet the financial requirements.

Before an applicant can qualify for benefits there are certain conditions that must be met. First, you must be age 65 or older. Second, you must be a naturalized citizen. The remaining requirements are explained below:

Medical Requirements:

  • Assistance with two or more activities of daily living (bathing, eating, dressing, toileting, continence, and mobility)
  • Require ongoing nursing home level of care

Financial Requirements:

  • Accumulated assets of no more than $4,000 (depending on the state it may be less)
  • Cash-value life insurance of no more than $1,500 (restrictions apply)
  • Cost of care must exceed applicants monthly income

So, what does this all mean? Basically, you must first require ongoing daily care with out-of-pocket expenses that exceed your monthly income as an individual and you must not have any assets in your name with a value over the limitations listed above. If, you meet all of these requirements then you may qualify for Medicaid LTC benefits in your state.

Five Year Look-Back

Medicaid enforces a five year look-back period and counts all gifts given within that time period against your eligibility. Under the Medicaid rules for married individuals, a penalty can be enforced regardless of which spouse made the gift. Any gifts given beyond five years are ignored.

The length of this penalty period depends on the value of the gift(s). The larger the gift, the longer the penalty period. Each state has their own penalty “divisor” figure that is used to calculate this period, so make sure to check with the state you’re applying for benefits with for this figure.

Most items with value are considered gifts including, but not limited too: automobiles, cash, CD’s, life insurance, real estate, stocks, water crafts, etc. Physical assets and/or property are assessed at fair-market-value.

Spousal Impoverishment

Now, you may be thinking “what about my spouse who is healthy and does not need care? Where will he or she live and how will they pay for their ongoing lifestyle?” There are separate standards in place for a healthy spouse who remains at home, if you’re applying for benefits and are married.

Each state is different, so you will want to verify the allowances within the specific state you’re applying for benefits. Below are the spousal impoverishment standards for Nebraska:

Maximum Allowable Asset Amount (liquid & physical)$128,640
Maximum Monthly Allowance$3,216
Shelter Monthly Allowance (mortgage, rent, taxes, etc.)$647
Standard Monthly Utility Allowance (gas, electric, water, etc.)$491

A spouse will also be able to keep their home, if they own it along with all of their personal possessions and one vehicle for transportation. Everything beyond that is is not allowed and will disqualify you for Medicaid if owned.

Medicaid Long-Term Care Benefits

Once a person has been approved for Medicaid, virtually all of their medical bills will be paid by the program. This includes prescription drugs, inpatient and outpatient hospital services, nursing care, medical equipment, etc.

The following services must be offered by all states:

  • physician services
  • lab and x-ray services
  • comprehensive dental services
  • family nurse practitioner services
  • nursing facility services

Most states also offer an in-home care option for individuals called “waivers”. The application process is the same and if you qualify you will receive care at home along with other services. Both Nebraska and Iowa offer these options.

Medicaid Planning

We all know how expensive nursing homes are, and without careful planning, a stay in one can easily bankrupt all but the most affluent families. According to a 2019 Genworth Cost of Care Survey the average annual cost for a nursing home stay in Nebraska is $86,000; assisted living facilities cost $48,000 a year on average.

Unfortunately, most people do not seek advice from a professional or seek it too late and are told that they must spend down their assets until they have reduced their life savings to the point that they qualify for Medicaid coverage. You can’t rely on Medicare, because it only covers a maximum of 100 days of in-patient care.

The only true way to keep from spending down all of your assets and giving them to the nursing facility is to properly plan. Its prudent that you work with a professional that specializes in Medicaid Long-Term Care planning to avoid any penalties that may prolong your out-of-pocket expenses.

Here at Nebraska Asset Protection Group we work with individuals and families to help save them from the high costs of nursing home care. We will construct a plan and pathway that streamlines your Medicaid eligibility without having to spend down all of your assets. We are proud to say that we have helped families save millions in assets and helped them protect their legacy.

If you would like a free consultation to learn how we can help, give us a call today at 402-531-9912 or click here to get started!

Published by Michael A. Luna, CIC

Asset protection specialist helping families and business owners achieve their goals.

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