Navigating Medicaid can be overwhelming, time consuming, and unpredictable at times. Before applying, it’s important to know your rights and have a grasp of the rules that govern eligibility. Of course, there are different rules for married couples and single persons. And if you think you have too many assets to qualify immediately, remember that there are lots of planning options which may allow you to qualify earlier than you think. Consider a consultation with a knowledgeable certified elder law attorney who can give you the facts before you talk to your county human services department.
Here is how Medicaid (under the TennCare Program in Tennessee) works in 2012:
For the person in the nursing home: For Medicaid to pay your nursing home bills in Tennessee, your monthly income must be less than $2,094 (based on 3x the SSI monthly rate = $698 x 3). You may keep $50/month in personal needs allowance and enough to pay for any health insurance premiums you have – the rest of your income must pay the nursing home.
If your income is more than $2,094 per month, you can use a Miller Trust to qualify for Medicaid and your income, minus the $50 personal needs allowance and health insurance premiums, is paid to the nursing home from the trust. Medicaid makes up the difference in the bill (in either case), based on Medicaid rates.
You may keep all of your exempt assets (home of less than $500,000 equity value, car, prepaid burial and funeral, burial plots for you and immediate family members, and some small life insurance) and $2,000 of countable assets, such as savings and investments.
For your spouse at home: When you qualify for Medicaid, your healthy spouse is guaranteed $1,839/month in income (changes each July), if the combined total income is at least that much. Your healthy spouse keeps his/her monthly income and as much of your income as it takes to reach $1,839. Your spouse may keep all of his/her own personal income even if it is more than $1,839/mo., providing your combined resources have been spent below the resource limit. The rest goes to the nursing home.
Your spouse, in some cases, may be allowed to keep one-half of the countable assets up to a cap of $113,640 ($22,728 minimum.) Your spouse is allowed to keep exempt assets including the house of any value, one car, household goods, a life insurance policy with a face/cash value of less than $1500, the well spouse’s retirement funds, a prepaid burial and funeral of any value (if itemized) or an irrevocable burial trust fund of no more than $6,000 and burial plots for you and your healthy spouse and your immediate family members.
***ALL remaining assets, no matter whose name they are in, must be spent down before Medicaid will pay the nursing home bill. But note: there are many Medicaid Planning options to protect assets from spend down. Get legal advice about your options.
Example: $300,000 combined assets. You get to keep $2,000 and your well spouse must spend down to $113,640. Example: $150,000 combined assets. You keep $2,000 and your well spouse may keep $75,000 and must spend $73,000.
Can you give your money away? If you have given money or property to anyone other than your spouse within 5 years before application, Medicaid will deny you benefits. But note: careful planning can shelter assets if you plan ahead. Get advice before you transfer assets.