For better and for worse, Medicaid is the primary method of paying for nursing home care in the United States. But navigating the Medicaid system is complicated and confusing. Here are the basics.
Medicaid (in Virginia administered through the Department of Medical Assistance Services in partnership with local Departments of Social Services ) is a joint federal-state program that provides health insurance coverage to low-income children, seniors, and people with disabilities. In addition, it covers long-term care for those who qualify. This coverage has traditionally meant care in a nursing home, although very limited coverage of some care in an assisted living facility or at home are possible.
In the absence of any other public program covering long-term care (Medicare provides only limited nursing home coverage), Medicaid has become the default nursing home insurance of the middle class. Lacking access to alternatives such as paying privately or being covered by a long-term care insurance policy, most people pay out of their own pockets for long-term care until they become eligible for Medicaid.
Each state operates its own Medicaid plan approved by the federal government. Federal money pays for about half a typical state’s Medicaid costs, with the state picking up the rest of the tab.
Medicaid eligibility rules vary vastly different from state to state, are numbingly complex, and change often in ways that are not well publicized or understood.
It’s crucial to consult an elder law attorney to guide you through the complicated rules. Spouses, children, and disabled persons are favored by these rules but only if you claim them. When there are disabled spouses and children, the elder law attorney can create estate plans to help them retain or qualify for Medicaid and certain Social Security benefits without becoming impoverished.
The majority of nursing homes accept Medicaid residents. Some do not. Some nursing homes limit the Medicaid beds available. Check with the facility before applying for admittance.
Before Medicaid expansion and reforms to protect spouses remaining in the community, disabled children, etc., applicants could have only limited assets and income. While many well-meaning people believe that assets above the limit (in Virginia, and most states, $2,000) must be “spent down” by paying for things that only benefit the Medicaid applicant, that is not accurate. While there are limitations in many cases, an applicant for long term care Medicaid may protect virtually unlimited amounts for the spouse still at home. Trusts and other devices can be used to transfer and shelter assets for disabled children and anyone who is disabled and under the age of 65.
In addition to the strict income and asset limits, you must meet level of care requirements in order to qualify for nursing home coverage. Each state sets its own level of care criteria and the criteria is not always clear. The state looks at an applicants’ functional, medical, and cognitive abilities to determine if they need care in a nursing home. You are usually determined to need long-term care if you need help with several “activities of daily living” (such as bathing, dressing, eating, moving, and going to the bathroom). But to need a nursing home level of care, you may also need frequent medical care, such as assistance with medication, injections, IVs, or other medical treatment. The state may also consider your cognitive abilities—i.e., whether you have the ability to make decisions on your own.
Once you qualify for Medicaid, except for the poorest of residents, there is a copayment charge from the resident’s income. That charge can be reduced to help provide for the needs of a community spouse and in some cases minor and disabled children in the home.
Home care in many states is provided through home- and community-based service “waiver” programs to individuals who need a high level of care, but who would like to remain at home, and have a plan for doing so. See Virginia’s waiver materials as of the publication date. You may be interested in our companion article regarding a temporary expansion of these waivers. However, states vary widely on how to qualify and what is covered. Almost all state Medicaid programs will cover at least some assisted living costs for eligible residents (Virginia’s assisted living benefit rules are particularly restrictive, and only apply to a very few facilities.)
An elder law attorney can help you navigate the Medicaid process for the best result.
*This article is provided for persons interested in elder law issues in Virginia and across the United States. This article has been written by a practitioner in the field of elder law, but unless otherwise noted, the writer is not affiliated with ThompsonMcMullan, P.C. Nothing in the newsletter or the articles is, or is intended to be, legal advice or a substitute for legal advice. If you need legal advice of any kind, please consult an attorney with experience in that area of the law, whether in our firm, or otherwise.