Although the Medicaid system may be a generally recognized public benefit, the intricacies of the program usually do not become relevant to individuals until they face the need to use it. For seniors and their families, that time generally occurs when discussing the need for nursing home care.

Medicaid is available to people who meet certain income and asset limits and is a common form of payment in nursing homes to pay for long-term care. This should not be confused with Medicare, which may pay for rehabilitative services, but does not cover long-term care.

Medicaid eligibility for long-term care is based on an individual’s income and assets. Income is used to determine whether the individual can afford to pay for monthly care needs without assistance. If unable to pay in full, the individual will be required to pay nearly all of his or her income toward the bill, with Medicaid covering the rest. Assets are counted to determine whether the individual has the non-income resources in place to pay for care.

Married couples are treated somewhat differently than individuals in several ways. A married couple’s assets are counted in total, regardless of whether the couple owns property jointly or individually. The assets are then split, with each spouse considered to own “half” of the assets for calculation purposes only — not an actual split. Second, married couples have additional asset exemptions available.

Not all resources are considered “countable” for Medicaid purposes. For example, prepaid funeral expenses, a car used to transport the institutionalized individual and qualified retirement accounts may be exempt from Medicaid’s countable asset limits.

For married couples, the primary residence used for a Community Spouse (the spouse still at home), as well as a large sum of liquid assets, also are excluded. Many non-countable assets are very specific to the individual situation or to current events. For example, stimulus checks were exempt assets, but only for a limited time.

The determination of assets quickly can become confusing because asset values fluctuate daily. For this reason, Medicaid must have a specific date for determining asset balances. This date is referred to as the “snapshot date.”

Because of the snapshot date, unmarried and married applicants are treated in different ways once again. For unmarried individuals, all asset protection and spend-downs should be completed prior to submitting the application for Medicaid. A detailed explanation should be included, particularly to explain any transfers of resources within the past five years.

However, for married applicants, in most cases a Resource Assessment Request should be first submitted to the Medicaid office before additional action is taken. This document details all resources that Medicaid will count and specifies exactly how much of those resources must be “spent down” by the institutionalized spouse for eligibility. That number then can be used to preserve assets in a way that is most beneficial to the couple.

In many cases, assets are preserved in full by turning the countable asset into a non-countable income stream to the spouse remaining at home.

The Resource Assessment is an excellent tool that serves as a guaranteed snapshot date for married couples and to ensure that any spend-downs are properly credited.

After the spend-down is complete, a full Medicaid application is filed, with proof of the spend-down. Failure to request a Resource Assessment may result in the Medicaid office counting the full (reduced) value of the assets and requiring a second spend-down on the remaining half.

Navigating Medicaid can be a complicated process, and should be immediately engaged upon an individual’s entering a facility. Understanding options up front can ensure that property is preserved, particularly for a spouse still at home.

Cynthia Griffin is an elder law and estate planning attorney at Burnett and Griffin PLLC in Elizabethtown. She can be reached at cynthia@bcglawcenter.com.

Cynthia Griffin is an elder law and estate planning attorney at Burnett and Griffin PLLC in Elizabethtown. She can be reached at cynthia@bcglawcenter.com.

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