Medicaid and Nursing Homes: An Overview

Mar 26, 2023 By Kelly Walker

Depending on the circumstances, Medicaid could pay for nursing home services and costs. Maintaining a certain income level is necessary to be eligible for Medicaid. Medicaid could not start paying for your nursing home until you've paid as much out of pocket as possible.

The Differences Between Medicare and Medicaid Roles in Nursing Home Care

Medicaid was established in 1965 as a social health care program to assist persons with low incomes in meeting the financial obligations associated with receiving medical treatment. Medicaid is a primary funding source for the long-term care needs of many elderly people.

To a certain extent, Medicare does pay for nursing home care. Medicare will cover the entire cost of your care for the first twenty days if you are transferred to a skilled nursing facility for treatment following a three-day inpatient hospital stay. If the patient does not have supplementary insurance, Medicare will cover most of the costs for the next 100 days; nevertheless, the patient is responsible for paying a set amount daily. The patient is responsible for any charges beyond day 101. Traditional Medicare is subject to these regulations. Individuals who enroll in Medicare Advantage plans probably have access to various advantages.

Medicaid covers nursing facilities for skilled nursing care, long-term care, and rehabilitation. Nevertheless, there is a possibility that certain nursing homes may not take Medicaid, which means that if you are already residing in a nursing home and later become eligible for Medicaid, you may be required to move to a different facility.

Qualifying for Medicaid

Medicaid is accessible in all 50 states to qualified individuals and families, pregnant women, persons with disabilities, and senior citizens. The ACA authorizes states to give Medicaid to people (under the age of 65) who do not have small children or a handicap. Medicaid systems differ from state to state.

The federal poverty threshold serves as the foundation for most income criteria. The regulations and prerequisites for participation are different in each state. For instance, the maximum allowable monthly income for an individual in New Jersey is $1,562, while the maximum allowable monthly income for a couple is $2,106. The maximum for single filers in Oregon is $1,507, while the limit for married couples is $2,030. To qualify for Medicaid, an individual may only have certain financial assets (such as bank accounts, cash, real estate, etc.).

How Your Assets Impact Eligibility

Your assets, in addition to your income, will be taken into consideration when determining whether or not you fulfill the qualifying criteria. Checking and savings account balances, certificates of deposit, stocks, and bonds are all examples of countable assets. You can exclude from your taxable assets up to $2,000 if you are filing as an individual and up to $3,000 if you are filing as a married couple in most states. These figures might be different for you depending on the state in which you reside.

Personal property, such as your home, vehicle, and funds put aside for last costs, are not considered assets. If you demonstrate that additional assets are inaccessible (maybe because they are held in an irrevocable trust), they are also excluded from the lien. A dwelling does not qualify as an asset as long as the nursing home patient or their spouse resides or plans to return there.

The nursing home where the applicant stays must be paid for using all of the applicant's income after they are approved for Medicaid. On the other hand, you may be able to preserve a monthly "allowance" and a deduction for medical expenses like private health insurance. The amount of the allowance varies from person to person and is determined by several factors, including your living situation, the kind of nursing home you are in, and the laws of your state. If you are married, you can be eligible for an allowance for the person still living with you after the divorce.

Medicaid Eligibility and Asset Transfer Rules

The Medicaid program has severe income limits; thus, in the past, some families would shift a patient's assets into the names of other family members, often the children, to qualify for the program. This action was taken in pursuit of Medicaid coverage. With the passage of the Deficit Reduction Act in 2005, it became much more difficult to engage in such practices. While enrolling for Medicaid, applicants must now disclose any asset transactions made in the previous five years during the "lookback" period.

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