In this video blog, Attorney David Banas discusses the myths of Medicaid. Click here to view.
Today we’re going to talk about unraveling some of the myths and misconceptions about Medicaid–some of things that give our prospective clients so much anxiety if they’re facing the issue of putting a spouse into a nursing home and the financial impact that’s going to have. There are so many things that you can read on Google that make it difficult for people to figure out what’s true, what’s exaggerated, and how it’s really going to impact an individual in certain situations. One of the most common myths that I love busting is that the government is going to take their house. The government is not going to take anybody’s house. There are complications with estate recovery after an individual has been on Medicaid, but there aren’t any instances where people have had to sign a deed to the State of Ohio because they have been on Medicaid. There are a number of instances in which the State may have to put a lien on a home, but losing one’s home is a myth that deserves to be put down.
The other thing that people misconceive about the Medicaid program is that you have to be dirt poor in order to receive Medicaid benefits, particularly in a nursing home. For married people, there are protections built into the Medicaid Act of the federal level and then passed down in the state of Ohio through its regulations to protect the community spouse if they are going to be at home while providing Medicaid benefits to a nursing home for the institutionalized spouse. Along with that, the community spouse can keep the home, the car, and all of their income without any limit. A lot of times, what we’re trying to do is generate more income for the community spouse because it’s not counted for eligibility purposes for the spouse in the facility. The community spouse is allowed to keep liquid cash–cash that the couple has based on a number of limits. The upper limit of what a community spouse can keep is $126,000-$127,000 of any kind of asset. Then we have to decide how we can restructure the rest the assets that may need to be spent down to benefit community spouse. So, there are a lot of protections for the community spouse.
There is also a lot of public policy behind these protections. They are built into the law for a reason. The thought is that if the husband has to go into a nursing home and the wife shouldn’t have to sell the house, spend all of their assets, and be impoverished in the community. What will happen is that two people will move to the nursing home and Medicaid will have to pay for two people every month, so these protections are good public policy. They’re there for a reason–to protect a spouse.
From a general perspective, an individual can’t qualify for Medicaid unless they have less than $2,000 in countable assets, but there are a number of assets that are exempt, even for a single individual. Again, a house, even for single individual, is considered exempt if you follow certain steps and procedures according to the Medicaid rules. An individual’s car could be exempt. Prepaid burial and funeral contracts are exempt assets. We can also arrange for that existing insurance policies to be irrevocably assigned to a funeral home so they don’t count against Medicaid eligibility. There a number of trusts that are established that are not counted for Medicaid eligibility. There are a number of income requirements that we have to consider. It’s very complicated, but it’s not mysterious and talking to someone, such as an elder law attorney or an advocate that knows the Medicaid system, particularly for spousal units, can really benefit in getting through this complexity and making it simple for an individual.
So there’s a bit of a question about what exactly long-term care is. Long-term care can be a lot of different things. There’s an elder law life continuum in which an individual may retire, live in the home, be completely fine on their own, and take care of themselves. As time progresses, their health may decline or they may need more help in the home, such as in preparing meals or doing yardwork. As things progress, more and more help is needed and the cost of that help rises until the individual may need to move out of their private home and into a senior living community. The next step might be to move to an assisted-living facility, where one receives more assistance with the activities of daily living. As the continuum progresses, on one might find themselves needing full on nursing home care and there are a number of ways that can be financed. First, people can pay for themselves. With estates larger than $1 million, many people decide they’re going to self-finance along with a long-term care policy they were lucky enough to get many years ago. There are VA benefits available that might provide extra income while you’re living at home to pay for in-home aids to help with those activities of daily living. Medicare provides some nursing home skilled care coverage, but that’s usually only after a hospital stay and a person is admitted to a nursing home for rehab. When the patient stops improving, then the rehab stops because it’s not considered rehab anymore. Often, families are faced with a private pay scenario in which they must decide whether they have enough money to pay on their own or if they need to turn to another funding source. That’s usually where Medicaid comes in.