Medicaid is a joint federal and state program that provides money to pay for medical care for people with limited income and limited assets. Medicaid provides medical coverage to older adults, people with disabilities, people that are blind, pregnant women, and minor children. For people that meet the eligibility requirements, Medicaid will provide money to pay for the following services: long-term care at a skilled nursing facility, in-home care, and community-based care.
Who qualifies for Medicaid for long-term care at a skilled nursing facility?
There are two overall requirements to qualify for Medicaid: medical need and financial need. The medical need is met if the person requires assistance with one or more activities of daily living. The financial need is met if the person has income and assets below the amount set by the guidelines. In general, a person must have less than $2,000 in assets to qualify if they are single and less than $3,000 in assets if they are married.
What happens if a person has income and assets above the maximum?
A person can still qualify for Medicaid if they have too many assets by performing a “spend down” to get the assets below the maximum allowed amount. The “spend down” must be performed knowing Medicaid will impose a penalty for certain types of transactions. In general, spending money on the following will not cause a penalty: paying medical bills, paying off debt, purchasing life insurance, purchasing a vehicle, purchasing a pre-paid funeral contract, or making home improvements. Knowing if a purchase has a penalty or not is critical to efficiently spend down the assets.
What is the penalty for non-qualified transactions?
The penalty for a non-qualified transaction is a delay in the start date for receiving Medicaid coverage. During this “penalty period”, the applicant will be ineligible to receive Medicaid benefits. The start date to receive Medicaid benefits can be delayed by months, or even years, due to the penalty period for non-qualified transactions.
How far back does Medicaid review financial transactions?
Medicaid will review all financial records and transactions going back five years (the “look-back” period). Medicaid will then analyze each transaction to see if it is a qualified or non-qualified transaction. Medicaid will then total the non-qualified transactions (if any) and assess the penalty.