What is Medicaid?
Medicaid is a joint federal-state program of medical assistance, with ties to other government benefit programs. Eligibility is tied to financial need, so there are limits on the income and on the resources that you can have and qualify for assistance. Those limits change from time to time. People who receive federal Supplemental Security Income (SSI) benefits or certain other government benefits are automatically eligible for Medicaid assistance. The federal Affordable Care Act plus an Oregon initiative expanded the groups of people who are eligible to receive services through the Oregon Health Plan (OHP), with the exception of ongoing long term care services. People who became eligible under the Affordable Care Act do not have resource limits. They may be required to pay monthly premiums for Oregon Health Plan coverage.
Oregon provides Medicaid assistance for long term care services for people whose incomes and resources are within the program’s limits and who meet the non-financial eligibility requirements. You have to undergo an evaluation of your care needs and your abilities to do the activities of daily living. The evaluation results in a service priority level. Since 2006, the Medicaid program has paid for long term care services for people in service priority levels 1 through 13.
Unlike Medicare, Oregon’s Medicaid program covers the full range of long term care services, including in-home care, adult day care, adult foster care, residential facility care, assisted living facility care, and nursing facility care. A 2017 study commissioned by the federal Center for Medicare & Medicaid Services found that Oregon used 82% of its Medicaid long term care funds for home and community-based care instead of nursing facility care. The average rate for other states was 55%. Once you are found eligible for Medicaid for long term care services, Medicaid also pays for doctor visits, hospital stays, medical transportation, durable medical equipment, medical supplies, eyeglasses, dental care, hearing aids, and mental health services, within certain limits.
What is the limit on income for long term care services?
The income limit is $2,250 per month in 2018. That amount usually changes in January. The Medicaid program counts almost every type of income, including Social Security benefits, pension benefits, annuity payments, interest, and contract payments. Only the income belonging to the person who is applying for Medicaid is counted. If you are married and applying for Medicaid for long term care, income that belongs to your spouse will not be counted. If your gross income (before any deductions for the Medicare Part B premium, taxes, union dues, etc.) is more than the income limit, you will not be eligible for Medicaid assistance to help pay for long term care.
What can be done if the person’s income is over the Medicaid income limit?
If your income is over the limit, you can qualify for Medicaid by setting up an income cap trust. An income cap trust is a special type of trust that is used to make it possible for a person who is over the income limit to get Medicaid assistance for long term care. The agent under a durable financial power of attorney may be able to set up an income cap trust for a person who is not able to understand the paperwork. The attorneys at The Elder Law Firm are experienced in preparing income cap trusts and helping people qualify for Medicaid assistance.
What is the limit on resources for long term care services?
The resource limit for a single person is $2,000 in 2018. The resource limit has not changed since 1988. The Medicaid program counts any resource that you could use to pay for care unless the rules make that resource exempt. Resources include cash, bank accounts, IRAs, investments, real property, vehicles, and the cash surrender value of life insurance policies. Resources in a revocable living trust are counted. Joint bank accounts and similar resources are counted as belonging to you unless the other joint owner has proof of the amount that he or she contributed to the joint account. There are special resource rules for married couples.
What resources are exempt?
The most common exempt resources are the home (as long as you or your spouse lives there), one car or truck, medical and adaptive equipment, furniture and household items, and an irrevocable prepaid funeral or burial plan. In Oregon, there is a $572,000 limit (2018 figure) on home equity.
What happens if the person who needs Medicaid gives something away?
If you give money or property away, or if you transfer something for less than its fair market, the gift or transfer may make you (and your spouse, if you are married) ineligible for Medicaid assistance for a period of time. There are harsh penalties if you (or your spouse) make gifts or transfers and apply for Medicaid for long term care within five years of making the gift or transfer.
The period of ineligibility does not begin until you have spent down to the resource limit and you meet the other eligibility requirements for Medicaid for long term care. The amount that was given away is divided by the average private pay cost of care to determine the length of the period of ineligibility.
There are some gifts and transfers for less than fair market value which do not result in a period of ineligibility. For example, there is no penalty if you transfer assets to your spouse. You should consult an experienced elder law attorney before making gifts or transfers if you or your spouse may need Medicaid assistance to help pay for long term care in the future.
What resources can be protected for the spouse of the person who needs Medicaid?
If you are married and you apply for Medicaid assistance for long term care services, the Medicaid program counts all of the non-exempt resources that belong to you, to your spouse, or to both of you. Exempt resources (such as your home) are not counted. The resource limit for the person applying for Medicaid is $2,000. Your husband or wife (who is sometimes called the community spouse) can keep the next $24,720 of non-exempt resources (in 2018) as his or her community spouse resource allowance (CSRA). If the value of the non-exempt resources is more than $24,720 (in 2018), a portion of those resources will be added to the CSRA to bring the CSRA up to a maximum of $123,600 (in 2018). However, you and your spouse will be required to spend down the non-exempt resources that are not part of your $2,000 in resources or your spouse’s CSRA before you will qualify for Medicaid. The attorneys at The Elder Law Firm have experience with strategies that help the community spouse keep a larger share of the couple’s assets in order to avoid becoming impoverished. If you have concerns about this issue, there are options that you and your spouse should explore before starting to spend down the resources.
Do the rules about income and resources apply to same sex couples?
The rules about income and resources for married couples apply to same sex couples if the marriage is valid under the laws of the state or the country where the marriage took place. The rules for married couples do not apply to same sex couples who not married, even if they are Oregon Registered Domestic Partners (RDPs) or entered into civil unions.
What happens to the person’s income after the Medicaid application is approved?
Once you start getting Medicaid assistance for long term care, the Medicaid rules determine what you can do with your monthly income. You can keep a limited amount to pay for your personal expenses. If you are getting services in your home or in an adult foster home, residential care facility, or assisted living facility, you will use part of your income to pay for your food and housing. You may be able to pay an allowance to your spouse; to pay your Medicare Part B premium, Part D prescription drug plan premium, and private health insurance premium; or to make payments on your past medical bills. You will pay the rest of your monthly income (after the deductions allowed by the Medicaid rules) towards the cost of your care. If you are married, the Medicaid rules do not require your spouse to use any of his or her income to help pay for your care.
What is the allowance that can be paid to the community spouse?
The Medicaid rules may allow you to give part of your income to your husband or wife (the community spouse) while you are getting Medicaid assistance for long term care. If the community spouse’s gross monthly income is less than the state’s standard community spouse income allowance, the portion of your income that is not set aside for your personal expenses and your food and housing can be used to make up the difference. You may be able to give an additional amount to help your spouse pay for housing and utility costs. The attorneys in The Elder Law Firm are experienced in increasing the amount of the community spouse income allowance and in using other strategies to provide additional income to pay the community spouse’s living expenses.
Will the Medicaid program take away the home or put a lien on it?
The Medicaid program will not take away your home. However, if neither you nor your spouse live in the home, the Medicaid program can require you to sell it. Some states place liens on property that belongs to the person who gets Medicaid assistance. As of 2018, Oregon did not. If you have a claim for a personal injury (for example, from a car accident), the Medicaid program will have a lien for repayment on any settlement or judgment that you get for the claim. The state also make claims for repayment against the estates of people who received Medicaid.
When can Medicaid assistance be recovered from an estate?
The state has a claim against the estate of a person who died after getting Medicaid assistance. The claim is for the amount of Medicaid assistance paid after age 55. If the person was permanently institutionalized before age 55, the claim may cover a longer period. “Estate” is defined as any interest in money or property that the person had at the time of his or her death. The definition includes joint accounts and other assets which do not have to go through probate, as well as certain assets that were transferred to the person’s spouse. The state cannot collect its claim while there is a surviving spouse or Oregon Registered Domestic Partner or a minor or disabled child. However, the state can make a claim against the estate of the surviving spouse or Oregon Registered Domestic Partner and collect from what the surviving spouse or domestic partner received when the person who got Medicaid assistance died.