How To Qualify For Medicaid If You Have Assets

Why Planning Well In Advance Matters

Its never too late to begin creating a health care plan. But like all planning, the more time you have, the more flexibility youll have and the easier it will be. Medicare employs a five-year look-back period when investigating an applicants finances.

Transfers of certain assets made less than five years before you require home care or enter a nursing home or assisting living facility may be disallowed. This means, for Medicaid purposes, youll still be deemed to own them and required to spend them down before qualifying for program coverage. And transfers to a trust just like transfers to individuals are still subject to this look-back period.

Keep in mind that Medicaid gives you little to no choice regarding where you receive care. Only facilities with Medicaid-approved beds can accept you, and your ability to remain in your own home when receiving care decreases, since many states only cover limited home health care services through their Medicaid programs. So its a good idea to sit down with your financial adviser to carefully explore your various long-term care insurance options before deciding on a strategy.

Strategies To Become Medicaid Eligibile While Preserving Assets

When a married couple has assets over the allowable amount, there are several strategies that can be used to lower the amount of countable assets. In turn, this allows an applicant spouse to become eligible for Medicaid. At the same time, these strategies may help families lower debt or preserve their assets.

Pay Existing Bills Assets can be used to pay existing debt. For instance, one may pay off a mortgage, credit card bills, outstanding medical bills, or pay off a car loan. Medicaid does not penalize applicants for these financial transactions.

Make Home Improvements or Home Modifications Assets can be spent on improving ones home, such as replacing a leaky roof and updating heating and plumbing systems. In addition, assets can be used toward making home modifications, such as widening doorways for wheelchair access, replacing regular bathroom sinks with pedestal sinks, and installing a roll-in shower.

Purchase Annuities An annuity is another strategy that is commonly employed to convert liquid assets into exempt assets. With an annuity, assets are turned into monthly income for the well spouse. . The way an annuity works is a lump sum is paid to a commercial insurance company and then the well spouse is in turn paid a monthly payment.

What You Can Keep

Texas is one of the unlucky 13 states with a Medicaid eligibility income cap with no allowance for medical expenses. In 2021 it is $2,382/month. The average Texas nursing home cost greatly exceeds this. For almost everyone in between $2,382 and the cost of nursing home care, even selling every last thing does not help for long.

And those with an income of $2,383/month will never meet the eligibility cap. They may qualify medically. They may need Medicaid for nursing home or home health care. But they will not qualify for it financially.

Since income is defined more broadly than for federal income tax purposes, many people who think they qualify based on income may not. The rules can be complicated.

Fortunately, in 1993 the federal Omnibus Budget and Reconciliation Act allowed people to transfer part or all of their income to a Qualified Income Trust.

A Qualified Income Trust pays a personal needs allowance for someone receiving Medicaid benefits . It pays for unreimbursed medical expenses such as dentistry and health insurance premiums. It pays up to $3,259.50 per month to maintain the spouse who remains in the community, and then pays a co-pay to the nursing home. There is rarely enough to pay the nursing home in full. Medicaid, funded by taxes collected by Texas and the federal government, pays the rest.

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Can I Qualify Even If My State Does Not Have Expanded Medicaid

In states that have not expanded Medicaid, eligibility levels are lower than in states that have expanded. Even if your state hasn’t expanded Medicaid and it looks like your income is below the level to qualify for financial help with a Marketplace plan, you should fill out a Marketplace application.

Request A Consultation With Our Ashland Medicaid Lawyer

Seven out of every ten seniors will eventually need long-term care so these expenses are something most of us will face. Medicaid can provide a solution so that you to keep some resources in the family. If you would like to discuss Medicaid planning with our licensed Ashland Medicaid lawyer, let us know.

Join us for a FREE seminar today! If you have questions regarding living trusts or any other estate planning matters, please contact the experienced attorneys at The Potter Law Firm for a consultation. You can contact us either online or by calling us at 324-5516 or at 372-6655 or for individuals in North Carolina at 944-3245 .

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Learn About Medicaid Asset Limits And Eligibility Requirements

Although Medicaid is federally funded, it is administered at the state level, and each state has its own set of rules and regulations for this program. The income and asset levels allowed differ from one state to another, so be sure to find out where your balance sheet falls in relation to the threshold.

If you are single, you generally cannot have more than $2,000 worth of cash or other assets outside of your residence, vehicle, and other necessary items unless your state has a higher limit.

If you are married and your spouse is still able to live independently, they are allowed to retain 50% of your joint assets up to a threshold of $130,380 as of January 2021. Your single or joint income usually cannot exceed 138% of the federal poverty level, although several states have thresholds above this amount.

In nearly all cases, you will also have to prove via medical documents that you are disabled. However, certain exceptions apply . You must also be either a U.S. citizen or have a green card and prove your residency within the state.

Does Every State Offer Expanded Medicaid

As of June 29, 2022, 36 states and Washington, D.C., have accepted federal funding to expand Medicaid under the ACA. Those that have not adopted the expansion measures are: North Carolina, South Carolina, Florida, Georgia, Alabama, Tennessee, Mississippi, Texas, Kansas, Wisconsin, South Dakota, and Wyoming.

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I Heard I Can Give Away $15000 Per Year Cant I

As discussed above, many people have heard of the federal gift tax provision that allows them to give away $15,000 per year without filing a gift tax return. What they do not know is that this refers to a gift tax reporting exemption, not to a Medicaid reporting exemption. Although a gift tax report may need to be filed, Here is no gift tax payable until cumulative lifetime gifts in excess of $15,000/year exceed $11.7 million! Having heard of the exemption, they wonder, Cant I give my assets away? The answer is, yes, but only if its done within the strict allowances of the law.

So even though the federal gift tax law allows you to give away up to $15,000 per year without triggering a gift tax return, those gifts could result in a period of Medicaid ineligibility for months, even years. Still, some parents want to make gifts to their children before their life savings are all gone.

Assets No Longer A Barrier To Medicaid Eligibility

Individuals and couples over the age of 65, people with disabilities under the age of 65, and residents of long-term care facilities who are enrolled in Medi-Cal with assets greater than $32,000 may have their assets eliminated under the Asset Limit Elimination provision of the ACA. People with significant assets may be able to receive additional help paying for medical costs as a result of this provision being added to the ACA. You may be able to keep your home, car, and other assets if you are over the age of 65, have a disability, or live in a long-term care facility without having to sell them in order to qualify for Medi-Cal.

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What Does Medicaid Cover

Medicaid is a joint state and federal program that provides health care coverage to qualifying individuals. Anyone who meets the eligibility requirements has a right to enroll in Medicaid coverage. Although each state has its own Medicaid program, the federal government places rules that all states must follow. Based on the federal rules, states run their Medicaid programs to best serve the qualifying residents.

States can elect to provide more services than mandated by the federal government and may extend coverage to a larger population.

Federal law mandates that states provide certain benefits, known as mandatory benefits, under Medicaid. States also may provide additional benefits and services, known as optional benefits. The table below shows some of the mandatory and optional Medicaid benefits.

Some Medicaid programs pay for health care directly, while others cover beneficiaries through private managed-care plans.

Because Medicaid is a jointly funded program, the federal government pays states for a certain portion of its program expenditures, known as the Federal Medical Assistance Percentage . States should be able to fund their shares of Medicaid expenditures for the services available under their specific plans.

Which Of The Following Is A Non Countable Asset For Purposes Of Determining Medicaid Eligibility

The resources of households and personal effects that are not counted are used to determine Medicaid eligibility. Clothing, jewelry, personal care items, recreational equipment, musical instruments, and hobbies are all examples of personal effects.

In 2012, 20% of Medicaid nursing home applicants owned assets worth more than $100,000. To apply for nursing home care, applicants must disclose all of their current assets to the state, including any disabilities or impairments that may prevent them from doing so. Legal Resources for Medicaid Assets In most cases, the state will not consider your home to be an asset if you or a family member uses it as a residence. The entire equity value of a property will be included as a resource in the states tax return. If you create a burial fund separately, the money cannot be more than $1,500 in total. The lookback rule is in effect when the state determines whether you are eligible for nursing home care in New York. If you gave away assets for less than their fair market value, you could face repercussions. If you plan to spend less, you will transfer your countable assets to avoid exceeding your resource allocation limit.

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State Adoption Of Optional Eligibility Pathways Based On Old Age Or Disability And The Aca Medicaid Expansion

Greater shares of states that have adopted the ACA Medicaid expansion also have adopted key optional eligibility pathways based on old age or disability, compared to non-expansion states . To date, 37 states have adopted the ACA Medicaid expansion, and 14 have not.45 Just under half of expansion states46 elect the option to cover seniors and people with disabilities up to 100% FPL, compared to less than one-third of non-expansion states.47 Nearly three-quarters of expansion states48 also offer the optional medically needy pathway for seniors and people with disabilities, while just over one-third of non-expansion states49 do so. Over two in five expansion states50 elect the Katie Beckett state plan option for children with significant disabilities,51 compared to just over one-third of non-expansion states.52 Nearly all expansion states53 also elect the option to cover working people with disabilities, compared to less than two-thirds of non-expansion states.54 The two states opting to use Section 1915 as an independent eligibility pathway are both expansion states. All states adopt at least one of these optional age and disability-related state plan options, with the exception of Alabama.

Figure 7: State Adoption of Optional Medicaid Eligibility Pathways for Seniors and People with Disabilities, by ACA Expansion Status, 2018

Advantages Of Forming An Llc

Many advantages, including limited personal liability, are available to LLCs. As a result, if a business goes out of business, you only have the option of continuing to invest in the LLC. This type of insurance can be a huge benefit to small business owners who may have been hesitant to take on the risk of starting a business. LLCs provide additional credit protection to your personal credit. Most lenders require borrowers to sign or guarantee LLC loans. As a result, if you do not sign or guarantee a loan to the LLC, your credit score will not suffer. You should be aware of some important factors when forming an LLC. First and foremost, ensure you understand the LLCs liability protection. If you intend to borrow money from an LLC, make sure to review your credit history. As a final note, make sure to keep lenders informed about any agreements you make. It is advantageous to have a good record of business dealings with LLCs if you are looking for business loans in the future.

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Can I Use My Hsa For My Spouse

You can use money from your HSA to pay for your spouses medical expenses as long as those expenses fit into the IRS rules. The IRS allows you to use your HSA to pay for eligible expenses for your spouse, children or anyone who is listed as a dependent on your tax return.

Thats true whether you have individual coverage or family coverage with an HSA through your health plan. There are, however, a few rules to know:

• You may only use your HSA to pay for qualified medical expenses for yourself, spouse, children or other dependents.
• Using your HSA to pay qualified medical expenses for your spouse does not affect your annual contribution limit.
• If you both have an HSA, your total contributions for the year cannot exceed the annual contribution limit for family coverage.

Again, qualified medical expenses are defined by the IRS. But if your spouse needs new glasses, for example, you could use your HSA to pay for them.

Paying medical expenses for a spouse out of your Health Savings Account doesnt entitle you to a higher contribution limit. However, the total amount you can contribute as a couple is affected by which of you has an HSA.

Exempting Assets While Applying For Medicaid In New York

These asset rules mean you could end up waiting months or even years for full benefits to kick in while you desperately need coverage for expensive care. While it didnt previously apply, a lookback period is also now in place for community and home-based health services as well as nursing home coverage through Medicaid.

The good news for the application process is that some assets are automatically considered non-countable and therefore exempt, such as:

• Burial funds in a separate account up to a specific amount, pre-paid burial services, and life insurance payouts earmarked for funeral expenses
• Household goods
• One primary vehicle
• Property used by your spouse for trade purposes, like a family business or farm
• Up to $2,000 in cash
• Your house or condo, up to a specific equity interest, if you are single and live alone
• Your house or condo, with an unlimited equity amount, if your spouse, child under 21, or disabled adult child of any age lives with you

Depending on your specific circumstances, there may be additional ways to convert countable assets into non-countable forms, such as by utilizing different kinds of trusts to preserve assets for your family. For example, some seniors may need to use a pooled income trust to retain access to funds while still maintaining eligibility under Medicaids inflexible limits.

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Medicare Savings Programs For Dual Eligible Beneficiaries94

States must offer Medicare Savings Programs through which low-income Medicare beneficiaries receive Medicaid assistance with some or all of their Medicare out-of-pocket costs.95 Medicare beneficiaries include seniors as well as nonelderly people with disabilities receiving Social Security Disability Insurance, generally after a 24-month waiting period. Medicares out-of-pocket costs, including premiums, deductibles, and other cost-sharing, can be high. For example, Medicare Part A, which covers inpatient hospital services, has an annual deductible of $1,340 in 2018.96 Medicare Part B, which covers outpatient services, requires a monthly premium of $134 for most beneficiaries in 2018.97 Part B also requires an annual deductible of $183 in 201898 and co-insurance of 20% of the Medicare-approved cost of services after the deductible is met.99 Box 4 describes the MSP pathways.

Box 4: MSP Pathways

To help low-income enrollees afford Medicares out-of-pocket costs, state Medicaid programs must offer three MSPs:

Qualified Medicare Beneficiaries generally have incomes up to 100% FPL .100 Medicaid pays Medicare Parts A and B premiums and cost-sharing for QMBs.

Specified Low-Income Medicare Beneficiaries have slightly higher incomes and receive help with Medicare Part B premiums only.101 Most states set their SLMB income limits at 120% FPL .102

Funeral And Burial Expenses

Most states will allow for the pre-payment of certain funeral and burial expenses. This can be a complicated issue, however, since individual states have their own rules about what can be purchased and how much can be invested in these expenses. Check with your individual state Medicaid program or an estate planning or elder law attorneyfor detailed information.

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Effective Date Of Coverage

Once an individual is determined eligible for Medicaid, coverage is effective either on the date of application or the first day of the month of application. Benefits also may be covered retroactively for up to three months prior to the month of application, if the individual would have been eligible during that period had he or she applied. Coverage generally stops at the end of the month in which a person no longer meets the requirements for eligibility.