MEDICAID FOR NURSING HOME CARE AND HOME AND COMMUNITY BASED WAIVER SERVICES.
On this page we will discuss the basics of Medicaid eligibility for Institutional or Nursing Home Coverage. Similar rules also apply to the Home and Community Based Waiver Program. However, there are many Medicaid Programs. Each program is targeted toward a different group or groups who need assistance in paying for health care.
These groups include low income families, SSI Recipients, Qualified Disabled Working Individuals, “Katie Beckett” Tefra Children; Low Income Elderly; Low Income Blind Persons; and Low Income Disabled Persons. We will cover some of those programs in other sections of this site and you may also obtain additional information from the South Carolina Department of Health and Human Services (SCDHHS). A link to their website can be found under the Resources Section of our Web Site.
This information is based on South Carolina rules, and rules in other states may differ significantly. However the information contained here will be useful for many states.
First a word of caution about Medicaid Planning lawyers. Medicaid laws and regulations are extremely complex, and experience in the field is very important. Many rules are not written, and others change without notice. If a lawyer says he or she is a Medicaid Planner or does Medicaid Planning, you should be cautious. Medicaid is only a one aspect of a proper Long Term Care Plan. In fact it may not even be appropriate for some Long Term Care Plans. Medicaid is tightly interwoven with Medicare Law, Social Security Law, Veteran’s Benefits, Tax Law, Estate Planning, Disability Law, Incapacity, Nursing Home Law, Insurance Law, Health Care Law, Real Estate Law, and Probate law. In order to properly prepare for and fund a Long Term Care Plan; whether in a Nursing Home, Assisted Living Facility, or at Home; one must maximize all available benefits, without offsetting the benefits obtained by cost in other areas, like TAXES. An attorney cannot reasonably formulate a proper Long Term Care Plan, without knowledge of all of these areas. Payne, Black & Pickelsimer, LLC has worked hard to develop the experience you need in these areas. Our attorneys have significant experience in all aspects of Medicaid Eligibility, Veterans Benefits, and Long Term Care Planning. Remember you want a Long Term Care Planner, not a Medicaid Planning Attorney.
The following is a synopsis of the basic criteria for obtaining Medicaid assistance for Nursing Home Care, and Home and Community Based Waiver Services in South Carolina. If an applicant satisfies all of the basic eligibility criteria, passes the resource and income tests, and any transfer penalty that applies has expired, then the applicant is eligible for assistance in paying the cost of his or her nursing home care or home care.
BASIC ELIGIBILITY CRITERIA. The initial requirements an applicant must meet in order to be eligible for nursing home Medicaid in South Carolina are as follows.
The applicant must be aged, blind, or disabled.
Aged is defined as age 65 or over.
Blind means a central visual acuity of 20/200 or less in the better eye with the use of a correcting lens, or a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater than 20 degrees.
Disabled means the inability to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment which can be expected to result in death, or which has lasted or can be expected to last for a continuous period of not less than 12 months.
The applicant must be a U.S. citizen or a permanent legal resident.
The applicant must already have, or agree to apply for, a Social Security number.
The applicant must live in South Carolina and intend to remain in South Carolina.
The applicant must be certified by a state agency, Community Long Term Care, as needing an Intermediate or a skilled level of care. This determination is based upon the medical needs and physical condition of the patient and should involve consultation with the patient’s primary care physician.
The applicant must reside in a Medicaid certified nursing home for at least 30 continuous days.
If the applicant is not currently married, is legally separated, or if his or her spouse does not live in the community (i.e. is also in a nursing home that accepts Medicaid) the applicant may have no more than $2,000 in countable resources.
If an applicant is married and his or her spouse lives in the community (not in a nursing home or other facility that accepts Medicaid) the applicant and the applicant’s spouse may have no more than $66,480 in countable resources. Within a short period of time after qualifying for benefits, all but $2,000 of countable resources must be removed from applicant’s name. The balance must be transferred into the spouse’s name.
Resources include all items of value, including investments, personal property and real property. However, some resources do not count towards the resource limit. As a result a Medicaid applicant or his spouse may own those assets without adversely affecting the applicant’s Medicaid eligibility. Some of the more significant non-countable resources are:
1. An irrevocable preneed burial contract with a funeral home for the applicant and one for his or her spouse is excluded. Currently there is no maximum dollar limit.
2. All burial plots which are designate for an immediate family member are excluded.
3. Life insurance policies with a face value of $10,000 or less. If the face value of all policies is more than $10,000 the cash surrender value is treated as cash and is countable.
4. A principal residence is excluded, including all adjoining land and all buildings on the property provided that: (i) the applicant states in writing that he or she intends to return to the principal residence, and the residence and contiguous land have a value of less than $500,000; (ii) the spouse or a dependent relative of the applicant resides in the home; or (iii) sale of the residence would cause undue hardship to a co-owner.
5. Household goods including furniture, decorations, art and appliances are excluded.
6. Certain types of income producing property are excluded; however, there may be a dollar limit on the equity in such property.
7. Life estate interests are excluded. A life estate is a right to use property for the rest of one’s life. Upon the death of a life estate holder the property becomes the property of designated persons.
8. Certain Promissory Notes MAY be excluded if the applicant or spouse is receiving regularly scheduled payments, and the instrument is non-negotiable, cannot be transferred, and cannot be liquidated.
9. Certain Annuities MAY be excluded if if the applicant or spouse is receiving regularly scheduled payments, the annuity cannot be transferred or liquidated, and the State Medicaid Agency is a beneficiary of the Annuity. (Rules are very specific. Most Annuities do not qualify for this exception.)
10. Assets other than cash and marketable securities may be excluded while the applicant is making a bona fide effort to sell them. Proof of efforts to sale will be required.
11. Personal effects such as clothing and jewelry are excluded.
12. Retirement funds such as Pensions, 401K Plans, or IRAs are excluded if they cannot be converted to cash or if they belong to the community spouse (a spouse residing at home or in a non-institutional setting). Further, the IRA of the applicant may be excluded if it is payout status.
13. One vehicle is excluded regardless of whether or not it is in use.
INCOME LIMITS. There are income limits which affect Medicaid eligibility. The first is the Medicaid Income Cap. If the applicant’s income is below the Medicaid Income Cap (effective 1/1/2009 this is $2,022.00 per month), the applicant passes the first income test, and his income will not affect his Medicaid eligibility. In the case of a nursing home resident, if the Medicaid applicant’s income is more than the Medicaid Income Cap, but less than the cost of private pay nursing home care, it is possible to use an income trust to eliminate the excess income from consideration. If the applicant’s monthly income is more than the private pay cost of the nursing home, Medicaid may or may not be of benefit to the applicant. You should consult with and EXPERIENCED Elder Law Attorney. For example if an individual has a spouse at home, the applicant’s income can be reduced to bring the income of the at home spouse up to the MMMNA, discussed in the next paragraph for purposes of determining Medicaid Eligibility. Thus Medicaid may still be very valuable.
SPOUSAL INCOME. Another important number is the Minimum Monthly Maintenance and Needs Allowance or the MMMNA. This is the amount the spouse of an institutionalized individual (i.e. a person in a nursing home) is deemed to need to support herself or himself. The amount is currently $2,541.00 per month, but generally changes annually to reflect inflation. If the Community Spouse (i.e. a spouse residing at home or in a noninstitutional setting) has income in excess of the MMMNA, all of the institutionalized spouse’s income must go toward his or her care. If the Community Spouse has income less than the MMMNA, the Community Spouse may keep enough of the institutionalized spouse’s income to bring him or her up to the MMMNA.
TRANSFER OF RESOURCE PENALTY. Transfers made for less than fair market values (i.e. gifts) which occur within 60 months prior to applying for Medicaid (the look back period) result in a period of Medicaid ineligibility. The length of this penalty period is calculated by dividing the value of the assets transferred by the average monthly cost of nursing home facilities in South Carolina, currently $5,130.99. All gifts made during the look back period are added together and the penalty begins to run on the date the individual becomes otherwise eligible for Medicaid.
There are some transfers which do not result in a Transfer of Resources Penalty.
A few of the more common exceptions are:
1. Transfers between spouses.
2. Transfers of the principal residence to (i) a minor or disabled child of the applicant, (ii) a child of the applicant who has resided in the principal residence for at least two years prior to the applicant’s admission to the nursing home and who provided care to the applicant which enabled the applicant to reside at home, or (iii) a sibling of the applicant if the sibling has an ownership interest in the house, and has been residing there for at least one year prior to the applicant’s admission to the nursing home
3. Transfers made solely for a reason other than to qualify for Medicaid. (Strict proof is required for this exception.)
4. Transfers for fair market value.
5. Transfers to a trust for the sole benefit of a disabled person (whether a child or not) under the age of 65. (Not all trusts qualify for this exception. The rules are very specific.)
6. Payments made pursuant to a valid Care Agreement.
7. Transfers made before February 8, 2006.
ESTATE RECOVERY. Under federal legislation passed in August of 1993, OBRA 93, the federal government mandated that the states begin estate recovery for expenditures of Medicaid dollars. What is estate recovery? As discussed above, under Medicaid regulations certain assets are exempt from consideration in determining Medicaid eligibility for nursing home care. Prior to estate recovery, a nursing home patient could retain exempt assets and pass them to his heirs following death. Under the estate recovery law, following the death of the nursing home patient who is receiving Medicaid assistance the state can force the sale of many of the exempt assets, including the principal residence, in order to repay the state for Medicaid dollars expended on the patient. Thus, absent proper planning, Medicaid eligibility may not save family assets from being exhausted on long term care costs.
WHAT DOES MEDICAID COVER?
What Medicaid will cover dependents largely on the Medicaid Program you qualify for. For example, if you qualify for the Nursing Home Program Medicaid will typically pay for you to be in a semi-private room in a Medicaid Certified Nursing Home. You MAY be required to contribute your income less certain deductions toward your care, and Medicaid generally pays the balance up to the Medicaid Reimbursement Rate. But Medicaid can cover much more. For a brief discussion of Medicaid Coverage go to our Medicaid Coverage Page. Also in the future, we will have a page on other Medicaid programs. In the meantime, go to our Resources Page. From there you can be connected to the SC Department of Health and Human Services Web Site, were more programs are explained.
The foregoing is only a brief synopsis of some of the more important rules relating to Medicaid eligibility. Medicaid is a very complex area of law. Other rules may apply. At Payne, Black & Pickelsimer, LLC we encourage anyone who believes they or a loved one could benefit from Medicaid to seek out a competent, experience attorney, and WE WANT TO BE YOUR LAWYER. We have answers to your Medicaid questions. We can guide you through Medicaid and the Long Term Care maze. If you currently have a spouse, parent, child, or loved one in a Nursing Home and paying for it privately, you need guidance, don’t wait, as valuable benefits are being lost every day. If you or a loved one is concerned about a need for care assistance whether at home, a nursing home, or in an assisted living facility; begin planning NOW. The sooner you implement a proper long term care plan, the better off you and your family will be. WE WANT TO HELP YOU IN THIS COMPLEX AREA.
WE WILL BE PROVIDING MORE MEDICAID BENEFITS INFORMATION AND MEDICAID UPDATES ON OUR ON OUR SC MEDICAID AND ELDERLAW BLOG COMING IN THIS SUMMER. SO VISIT FREQUENTLY; OR SEND US YOUR EMAIL AND WE WILL LET YOU KNOW WHEN OUR BLOG IS UP AND RUNNING.
The foregoing information is subject to change at any time, and other more complex rules may apply. Do not rely on information you may not fully understand. If you need help in this area seek the assistance of a competent, experienced Elder Law Attorney. This site is not intended as legal advice.