Strategies to Achieve Medicaid Eligibility for Nursing Home Care in the United States

Nursing home care in the United States is expensive, making it challenging for any family to cover the cost of care. Fortunately, most people can arrange their assets and income to become Medicaid eligible in order to plan for the astronomical costs of nursing home care in the U.S. But, first, why is nursing home care so expensive? 

Long-term care, like a nursing home, is expensive because it requires specialized training, staff, and medical assistance. Not only are skilled nursing staff required to provide care 24/7, but the facilities themselves are expensive to maintain. For example, a typical nursing home has an annual operating budget of well over $6 million, which includes the cost of utilities, insurance, staff salaries, and medications. 

How much does it typically cost per day to live in a nursing home? 

The median cost of a private room in a nursing home is about $253 per day, or over $92,000 per year. A semi-private room costs a bit less, at a median of $235 per day, or over $85,000 per year. So, how can the average person or family afford nursing home care?

What is Medicaid?

Medicaid is a government health insurance program for people with low incomes and few resources. Medicaid helps pay for long-term care, which includes nursing home care, in-home care, and hospice care. 

What is the difference between a nursing facility and a specialized nursing facility? 

The Medicaid program will only pay for care received in a nursing facility that is licensed by the state. A specialized nursing facility must meet additional federal requirements, such as having a minimum number of beds and providing a higher level of care than a nursing facility. 

How does one become Medicaid eligible?

To be eligible for Medicaid coverage of nursing home care, an individual must meet certain asset and income requirements. Medicaid will consider an applicant’s countable assets, which can include cash, bank accounts, investments, and property. Medicaid will also look at an applicant’s income to determine eligibility. In general, Medicaid requires that an individual’s income be below a certain level in order to qualify for coverage.

What are the initial Medicaid eligibility requirements for nursing home care in the United States? 

To be eligible for Medicaid coverage of nursing home care, an individual must be:

– A U.S. citizen or legal permanent resident

– 65 years of age or older, or

– Disabled, as determined by the Social Security Administration

For most people, private long-term care insurance is not an option, as the premiums are just too expensive. Long-term care insurance typically only pays for a portion of nursing home costs and has many exclusions and loopholes. For example, most policies have a “look-back” period, which means that if you have had any kind of health issue in the past five years or so, your policy may not pay out at all. 

So how can you arrange your income and assets to make you eligible for Medicaid coverage of nursing home care? 

The following is brief description of just a few of the most common strategies:

1. Give away your assets. You can give away your house, car, bank accounts, and other valuables to your children or other family members. The government imposes a “look-back period” of five years, so any gifts made within five years of applying for Medicaid will be considered part of your countable assets. 

2. Put your assets into a trust. You can create an irrevocable trust and transfer your assets into it. This type of trust is not counted as an asset by the government, so you can still qualify for Medicaid coverage. 

3. Spend down your assets on long-term care costs. This means using your assets to pay for nursing home care or other long-term care services. Once your assets are depleted, you will then be eligible for Medicaid coverage. 

4. Apply for a Medicaid waiver. A Medicaid waiver allows you to receive long-term care services at home or in the community instead of in a nursing home. This can help you avoid having to spend down your assets to become eligible for Medicaid coverage. 

5. Purchase a long-term care insurance policy. This type of policy can pay for nursing home care or other long-term care services if you need them in the future. If you have a long-term care insurance policy, you may not have to spend down your assets to become eligible for Medicaid coverage. 

These are just a few of the strategies that you can use to become Medicaid eligible for nursing home care in the United States. There are strategies that elderly Americans can use to meet Medicaid eligibility requirements for nursing home care in a more comprehensive manner. One strategy is to work with a Medicaid planner. Medicaid planners are professionals who help people navigate the Medicaid eligibility process. These professionals are typically lawyers and work in several interrelated fields of the law. This includes elder law, estate planning, tax, and probate. 

Medicaid is a complex program, and there are many rules and regulations that govern eligibility. Working with a Medicaid planner or other professional can help individuals navigate the Medicaid system and understand what options are available to them.

What is Elder Law? 

Elder law focuses on the care and needs of older adults. Elder law attorneys can help with issues such as Medicaid eligibility, long-term care planning, and estate planning.

What is Estate Planning? 

Estate planning is the process of creating a plan for how your assets will be distributed after you die. Estate planning is the most effective means to minimize taxes, avoid probate, and protect your assets from estate recovery.

Estate planning is the process of arranging for the transfer of your property after your death. It is important to consult with an experienced attorney or lawyer before making any decisions about Medicaid or estate planning. The laws surrounding Medicaid and estate planning are complicated and can vary from state to state. You may need help from an expert in Medicaid lawyer to ensure that you are making the best decisions for your family. 

If you are considering nursing home care, it is important to start planning as soon as possible. The cost of nursing home care can be expensive, and it is important to make sure you have enough money saved up. Medicaid and Medicare may help pay for nursing home costs. 

Remember: Medicaid is a federal program that assists individuals who meet certain Medicaid eligibility requirements. Medicaid has extremely strict rules about the total value of assets you are allowed to own or possess, and what income you can receive before losing Medicaid benefits. 

What is Probate? 

Probate is the legal process of distributing a person’s assets after they die. Probate can be costly and time-consuming, so many people try to avoid it.

What is a Medicaid Trust? 

A Medicaid trust is a type of trust that can help you qualify for Medicaid coverage for nursing home care. A Medicaid trust can be used to protect your assets from being used to pay for your long-term care costs.

What is Medicare?

Medicaid and Medicare are two different programs. You may qualify for Medicaid without having Medicare, or you may have both Medicaid and Medicare. Medicare is a federal health insurance program for people aged 65 or older, people under age 65 with disabilities, and people of all ages with End-Stage Renal Disease. Medicare helps pay for some health care costs, including hospital stays, doctor visits, and prescription drugs. There are two parts to Medicare: Part A and Part B. Part A covers inpatient care in hospitals and skilled nursing facilities (like a nursing home). Outpatient care, such as doctor visits and lab tests, are typically covered under Part B. 

What is the difference between Medicaid and Medicare?

Medicare is a federal health insurance program for people who are 65 years of age or older, or who have certain disabilities. Medicaid is a state and federal health insurance program for low-income Americans of all ages.

Medicaid pays for a wide range of medical services, including doctor visits, hospital stays, nursing home care, and prescription drugs. Medicare pays for some, but not all, of these services.

How do I get Medicaid to pay for nursing home care?

It is crucial to find an experienced attorney or lawyer with experience in crisis Medicaid planning and tax law before applying for Medicaid eligibility. Medicaid is different from Medicare and is partially administered by the state within which you reside. Revolving around that are issues of federal taxation, including assets, irrevocable trust creation, and developing a last will and testament. This, of course, includes finding the best place for a loved one in a skilled nursing facility, getting Medicaid to cover the costs, and not having your estate recovery department take back any money. Medicaid planning is a complex process that should be handled by those who know the ins and outs of Medicaid law. 

Medicaid and Medicare are complex laws that can be difficult to understand. It is important to consult with an experienced attorney or lawyer before applying for Medicaid eligibility. Each state has different rules for Medicaid eligibility, and the process can be complicated. You may need help from an expert in Medicaid law to make sure you qualify for Medicaid. 

How do I get Medicare, rather than Medicaid, to cover the cost of long-term care? 

There are two types of long-term care options: skilled nursing facility (SNF) care and custodial care. SNF care is for people who need skilled nursing or rehabilitation services. Custodial care is for people who do not need skilled nursing or rehabilitation services but need help with activities of daily living (like bathing, dressing, and using the bathroom). 

Medicare does not cover custodial care. Medicare will only pay for SNF care if you meet certain conditions. To get Medicare to pay for SNF care, you must be: 

– hospitalized for at least 3 days in a row

– discharged from the hospital to a SNF

– have a doctor’s order for SNF care

– be receiving skilled nursing or rehabilitation services

If you do not meet all of these conditions, Medicare will not pay for your SNF care. Medicaid will pay for custodial care, but only if you meet certain eligibility requirements. 

Medicare’s Resource Limits (Part A) include: $0 in assets; $80/day personal needs allowance for Part A and B; $164/day maximum inpatient hospital coverage per benefit period (in 2018). For those in New York State, Medicaid applicants must be below $2,000/month net income and have less than $1,500 in assets. 

The Medicaid and Medicare programs are complex laws that make preparing for nursing home care and estate planning a challenge. However, it is important to understand the basics of these programs so you can plan accordingly. Medicaid eligibility is a crucial part of elder law and estate planning. 

 Always speak with a specialist before taking any steps that could affect your rights.

Article by Brad Biren

Brad Biren is a proud autistic professional, writer, and advocate for neurodiverse people within the business community. He is a tax & elder law attorney with a passion for estate planning and crisis Medicaid planning. His favorite part of his job is Special Needs Planning — a financial and legal roadmap to help families of diversely-abled people cultivate greater opportunities for their loved ones. Mr. Biren also assists startups and nonprofits with optimization challenges through his innovative and novel use of synergies between tax, law, finance, science, and technology.

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