MEDICAID

The Payer of Last Resort

Medicaid is a joint federal and state program that provides medical assistance for individuals with extremely low incomes and limited assets.  That is why Medicaid is known as the Payer of Last Resort.  

• To receive assistance from Medicaid, recipients must be destitute.
• Medicaid recipients requiring Long Term Care in a Nursing Home will be assigned to a facility by Medicaid based upon cost and availability.
• Medicaid discourages Home Health Care.
• Medicaid does not pay for benefits in an Assisted Living Facility.

As a Medicaid recipient you will probably be compelled to enter a Nursing Home in order to receive care because Medicaid is strongly biased against paying for non-institutional care.

Medicaid pays for Nursing Home care when:

• The facility is a certified Medicaid provider in the state.
• The patient needs the level of medical care provided by the skilled care facility.
• AND    The patient is financially destitute.

Medicaid patients frequently have difficulty being admitted into a nursing facility, since by definition they are the lowest paying patients there.  Therefore, Medicaid patients may not find a bed available when it is needed.

Financial Eligibility for Medicaid
 In order to be eligible to receive Medicaid, a person must have not only a limited income, but extremely limited assets as well.

Assets include:   Checking and Savings Accounts, Stocks, Bonds, Mutual Funds, CD's, and any other liquid assets.  In addition, any other real property including automobiles, homes, jewelry, and any other personal belongings are considered to be assets.

The income rules do not apply to the well spouse.  He or she is free to continue working and may keep all of their salary and other income including social security.

WARNING

Many Elder Law Attorneys and Financial Planners have been counseling clients to divest themselves of assets in order to qualify for Medicaid assistance.

It is now becoming apparent that in many cases this is poor advice.

Due to severe fiscal constraints, many of the states are being compelled to reform their Medicaid programs making eligibility for Medicaid much more difficult to attain.

As of January 1, 2006 under Federal Law:

• The look-back period has been increased from 36 to 60 months. This is the period of time during which financial transactions of all Medicaid recipients will be subject to review, both institutionalized as well as non-institutionalized individuals.
• The penalty period for all Medicaid services now commences on the date of the application for benefits, rather than on the date of the gift.
• Spousal Refusal for Home Care is being eliminated, and severely limited for spouses of institutionalized persons.
• The purchase of Long Term Care Insurance is being encouraged in an effort to reduce the role and cost to the states.

Spend-Down provisions for Medicaid Eligibility

OBRA 1993

This Federal Law, passed in 1993 Requires the states to attempt to recover from the Estates of Deceased Medicaid Recipients the costs of medical assistance paid out under Medicaid.

The state can go against any real or personal property, or other assets in which the deceased had some interest, INCLUDING THE RESIDENCE.

In many cases the state can even recover from assets that were given away prior to death.

Medicaid is truly the Payer of Last Resort.  However, if you are fortunate enough to qualify for assistance; upon your death, if you have anything left THEY WANT IT BACK!

Medicaid Maximums Listed by State

If you have too much income or too many assets you do
not qualify for Medicaid until you have spent down your assets.