Given the prevalence and cost of long-term care, all seniors and their families should be knowledgeable about Medicaid and the planning options available to qualify for Medicaid.
Why is Medicaid Planning Important?
The need for long-term care is common but the cost is staggering. Seventy percent (70%) of people over age 65 will need long term care during their lifetimes. The average nursing home stay is 2.4 years. The average annual cost of a nursing home room in the Cleveland Metropolitan area is $73,912.50.
Medicare pays the cost of a skilled nursing facility for up to 20 days, with a co-pay of $167.50 (2018) per day for the next 80 days. However, once Medicare coverage terminates at 100 days, the individual must pay out of their own pocket. How can the average person afford to pay for nursing home or other long-term care? The answer is Medicaid.
What is Medicaid?
Medicaid is a health insurance program funded by state and federal money and administrated by the Ohio Department of Medicaid.
Community Medicaid is very much like a traditional health insurance program. It covers inpatient and outpatient hospital care, physician and dental care, prescriptions drugs, mental health services, etc.
Institutional Medicaid (or Long Term Care Medicaid) pays the cost of long-term care in a nursing home. Under the Institutional Medicaid umbrella are also waiver programs that allow the applicant to reside in an assisted living facility or at home.
Specifically, the Assisted Living Waiver Program pays the medical cost of an Assisted Living or Residential Care Facility services. The Passport Waiver Program pays for personal care, respite care, homemaker services, home-delivered meals, chore services, home health care management, among other services to allow you to stay at home.
What are the Eligibility Requirements for Long Term Care Medicaid?
Medicaid has four eligibility requirements.
- Residency: The applicant must be a resident of Ohio.
- Age or Disability: The applicant must be either 65, blind or disabled. To be eligible for Institutional Medicaid, the applicant must also have a nursing home level of care.
- Income: The applicant’s gross monthly income must be below $2050 (2018). If income is above, a QIT (Qualified Income Trust) can be established to qualify. A married applicant’s spouse may be entitled to keep some of the applicant’s income.
- Resources: A single applicant cannot have more than $2,000 (2018) in countable resources. There are many exempt resources including a home the applicant intends to return to or where a spouse or dependent relative lives, automobile if used for transportation, life insurance policies with cash value less than $1,500, among others. Different resource rules apply to married couples.
How Can I Qualify for Medicaid if I Have Too Much Income or Resources?
First, it is important to note that an applicant cannot simply give excess resources away. Giving an asset away for less than fair market value is considered an improper transfer. Ohio has a five year look-back period. This means that the state looks back five years from the date of Medicaid application. If any improper transfer was made during that time, the applicant will be penalized.
Despite the look back period, there are many planning options available to help preserve your resources and improve your quality of life. Contact a Medicaid planning lawyer to schedule a consultation to discuss your planning options.