Qualifying for Nursing Home Medicaid and More
Authored By: Legal Hotline for Texans
WHAT IS NURSING HOME MEDICAID?
Nursing Home Medicaid helps to pay for institutional (nursing home) care for qualified low income persons.
What are the age or disability requirements?
In Texas, people who are sixty-five (65) or older, or who are disabled or blind, and who need nursing home care, may qualify for nursing home Medicaid. They must also meet income and resource limits. The income and resource limits change every year.
What are the income limits?
To be able to get nursing home Medicaid in calendar year 2013, a single person’s monthly income cannot be higher than $2,130. If both spouses of a married couple need nursing home care, the couple’s monthly income cannot be higher than $4,260. Income of a parent(s) is not counted for a child.
Income includes Social Security benefits, certain veterans’ benefits, private pensions, interest or dividends, royalty and rental payments, federal employee annuities, railroad benefits, state or local retirement benefits, gifts or contributions, and earnings and wages. The Texas Health and Human Services Commission counts all income coming in the name of the person. If a person is married, it does not matter if the income is community or separate income and it does not matter if the income is received in the name of the other spouse.
What is a Qualified Income Trust and how is it used?
A Qualified Income Trust is a way to allow a person to get nursing home Medicaid even if his or her income is too high. If a person does not have too many resources, and his or her income is not enough to cover the expenses of nursing home care but is above $2,130 a month, the person may be able to get a Qualified Income Trust. Some people call a Qualified Income Trust a Miller Trust. The person’s income goes into the trust and it pays for the person’s medical care and nursing home expenses. The nursing home resident gets a small monthly allowance for personal needs from the trust as well. Nursing home Medicaid makes up the difference between the person’s monthly income and the cost of nursing home care. If there is anything left in the trust when the nursing home resident dies, the left over money is paid to the state.
If you think you or a loved one needs a Qualified Income Trust, you should talk to a lawyer.
What are the resource limits?
Resources are assets, that is, things you own. Resources are bank accounts and CDs, real property (land with or without buildings), life insurance policies, burial funds, IRA, stocks and bonds, oil/gas/mineral rights, jewelry and antiques, cars and other vehicles, and boats and recreational vehicles.
A couple (where both spouses need to be in a nursing home) can have up to $3,000 in resources. A single person who needs nursing home care can have up to $2,000 in resources.
Some property does not count toward the resource limit. When property does not count toward the limit, it is called excluded property. Excluded property includes:
· the homestead as long as the spouse (or certain other relatives) are living on it or the nursing home resident plans to return to live there and substantial equity in the house is less than $536,000;
· life insurance with a face value of $1,500 or less;
· $1,500 or less of pre-paid burial expenses (the total of life insurance and pre-paid burial expenses must not be more than $1,500)
· irrevocable, pre-paid burial contracts;
· a burial plot for the nursing home resident, spouse, and close relatives; and
· one car.
· resources of a parent(s) are not counted for a child
These things do not count toward the $3,000 or $2,000 amount, whichever applies. All other property owned by the person who needs nursing home care is counted. If the total of all the property is more than $2,000 for a single person or $3,000 for a married couple, the person cannot get nursing home Medicaid.
If only one spouse needs nursing home care, the resource limit is $2,000.
Can you give away assets to qualify for Nursing Home Medicaid?
There are rules that must be followed to give away assets. If the person applying for Medicaid gives away property and does not receive a fair payment for it, the person may have a penalty. This means Medicaid will not pay for nursing home care for a certain period of time. The state can look back for up to 60 months before a person applied for Medicare to see if the person gave away property. This may cause the person to be denied Medicaid. The penalty period is determined by dividing the amount of the transfer by $142.92 to find the number of months that Medicaid will not pay for the person’s nursing home care. It is risky to try to give away property to qualify for Medicaid.
What if only one spouse is going to the nursing home?
If people are married, and only one spouse needs nursing home care, the spouse who stays at home is called the "community spouse". When this happens, the spouse entering the nursing home can have up to $2,000 in countable assets. And, the "community spouse" gets some resources that are protected. To figure out how much in assets the community spouse can keep, figure out the value of one-half of the couple's property not counting their homestead, household goods, personal goods, one car, and burial funds. The community spouse may keep one-half of all the other property of the couple, but not less than $23,184 nor more than $115,920.
The community spouse can also have $2,898 a month to live on. This is called the spousal allowance or monthly minimum needs allowance. If the community spouse’s income is more than $2,898 a month, there is no need for the spousal allowance.
If there is a dependent, the dependent allowance is $1,892 per month. This means the dependent of the person in the nursing home can have $1,892 per month to live on. If the dependent’s income is more than $1,892 a month, there is no need for dependent allowance.
The protected resources amount can be increased when the income of the community spouse is lower than the minimum monthly maintenance needs allowance. When this happens, the spouse in the nursing home can give income to the spouse in the community. But to do this you have to have a fair hearing. A fair hearing takes place after the applicant has applied for nursing home Medicaid and has been denied. The applicant must request a fair hearing asking that the protected resource amount be increased for the community spouse. An applicant should contact a Benefits Counselor with the local Area Agency on Aging or a lawyer to help with a fair hearing. The request for a fair hearing must be made within 90 days after the Health and Human Services Commission denies a person’s application for Medicaid.
What is “applied income”?
After a person is eligible for nursing home Medicaid, “applied income” is calculated by an HHSC worker. “Applied income” is the part of a person’s income that has to be paid to the nursing home. “Applied income” is calculated for an unmarried individual as follows: find the net earned and gross unearned income, deduct a “personal needs” allowance of $60, and deduct medical expenses such as Medicare premiums and health insurance. What is left is the “applied income” that is paid to the nursing home.
Incurred medical expenses are expenses the nursing home resident has to pay for Medicare and other health insurance premiums, deductibles and coinsurance, and medical care and services recognized by state law but not covered by Medicaid.
The following is an example of applied income calculations. The nursing home resident has income of $1,600 and has incurred medical expenses of $200 per month. Community Spouse (CS) has income of $1,800 per month.
$1600 (nursing home resident’s income)
- $ 60 (personal needs allowance)
+ $1,800 (community spouse’s income)
$3,340 Total income
Subtract $2,898 for spousal monthly maintenance needs allowance.
Then, subtract $200 for incurred medical expenses.
The nursing home is paid $242. The remainder of the applicant’s income, goes to the community spouse.
What if HHSC disagrees with this amount?
An adverse decision by HHSC can be appealed at a “fair hearing”. A request for a “fair hearing” must be made within 90 days of an adverse decision by HHSC. Before going to a fair hearing, you should talk to a benefits counselor at your Area Agency on Aging or a lawyer. AAA benefits counselors are certified to help people at fair hearings.
How do I apply for nursing home Medicaid?
There are three ways to apply for nursing home Medicaid.
1) People who are in the hospital and who need to go to a nursing home from the hospital may ask the hospital social worker to help them apply for nursing home Medicaid.
2) A nursing home administrator can get the family in contact with a Texas Health and Human Services Commission (HHSC) caseworker who can take applications for the nursing home.
3) The patient or family can contact the HHSC office serving the county where the nursing home is located and ask to apply for nursing home Medicaid. In some counties, the local HHSC office has a specific person (a ‘screener”) that handles nursing home Medicaid applications.
Remember: To get nursing home Medicaid, a doctor or other health care professional has to say that the person needs nursing home care. And, HHSC will not grant an application until the applicant has been in the nursing home for 30 consecutive days. HHSC has 45 days in which to grant or deny nursing home Medicaid to a person 65 or older and 90 days to grant or deny Medicaid to a person who is under age 65 and is disabled. If the application is granted, Medicaid will provide benefits retroactively to the first day of the nursing home care.
What can I do if my benefits are denied, terminated, suspended, or reduced?
If an application is denied (or if benefits already granted are terminated, suspended, or reduced), talk to a AAA benefits counselor or a lawyer as soon as possible. If the application was an initial application (and it has been denied), the applicant can request a fair hearing to contest the denial. This appeal must be requested within 90 days of the denial. If the person was already receiving nursing home Medicaid and their benefits were terminated, suspended, or reduced, the person only has 10 days to act.
For more information…
Texas Law Help has useful information on many areas of the law. Go to www.texaslawhelp.org.
Legal Hotline for Texans: (800) 622-2520
Speak to an attorney. Advice is free for Texans 60 and over or for anyone eligible for Medicare.
Your local Area Agency on Aging has benefits counselors who can assist you in evaluating whether you qualify for Nursing Home Medicaid. Call (800) 252-9240 to locate your local office.