Medicaid: The Basics
Frequently we hear from our clients that they have been advised by people who mean well to transfer assets out of their name when they face having to move a spouse to a nursing home. People often fear they will lose everything when their spouse needs long term nursing home care. We will provide a series of articles on Medicaid. This first article will provide some basic information about Medicaid and long term nursing home coverage.
Medicaid will pay for long term nursing home care for a person who is a U. S. citizen or a legal alien who meets 2 types of criteria. First, the person must meet the requirements that show he needs long term nursing home care. If a person needs assistance with two of the five Activities of Daily Living (ADL's) or needs "24/7" care, he should meet this requirement. The ADL's include bathing, eating, dressing, toileting, and ambulating. Second, the person and his spouse must meet financial criteria. The person must not have more than $1500.00 in "countable" assets. The spouse is limited to a certain amount of "countable assets" as well. There is a minimum amount as well as a maximum amount.
"Non-countable" assets for a married couple include household goods and personal possessions, one motor vehicle, a prepaid irrevocable funeral plan, life insurance with a face value of $1500 or less, "inaccessible" assets, and the principle residence. "Countable" assets include all other assets. Income is not considered an asset for Medicaid purposes and is treated differently.
A person who applies for Medicaid will be penalized for any improper transfers that the applicant has made potentially over the past five years. Medicaid considers gifts and charitable donations to be improper transfers. Consequently, an applicant will be penalized for giving gifts to a grandchild, a child, or a church even though the applicant was not even contemplating nursing home care for herself or her spouse. Paying for college tuition, for a wedding, for medical expenses, and for a pledge to one's church is not permitted.
August 2007
