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Long-Term Care Planning – Frequently Asked Questions

1. Will Medicare pay for non-skilled care?

Medicare only covers skilled care in nursing home, and there is no Medicare benefit for custodial or non-skilled care.

Medicaid covers custodial or non-skilled care when the patient meets all applicable eligibility criteria, including income and resource limitations.

2. Will Medicare or Medicaid pay for Assisted Living Facilities?

Neither Medicare nor Medicaid will cover the cost of assisted living facilities.

3. What are the Resource eligibility rules for Medicaid?

  • $2,000 limit for individuals applying for benefits
  • $3,500 limit if both husband and wife are applying at the same time
  • Community Spouse Resource Allowance (CSRA) for a non-institutionalized spouse remaining in the home (i.e. “Community Spouse” or CS)

4. What is a Resource Assessment for Medicaid purposes?

The Resource Assessment calculates the couple’s “countable resources” (i.e. bank accounts, IRAs, 401Ks, investment accounts, stocks, bonds, cash, etc.) as of the beginning of the Medicaid applicant’s first continuous period of institionalization lasting for at least 30 consecutive days.

5. Are there any exempt or non-countable resources for Medicaid eligibility purposes?

There are a number of exempt resources for Medicaid eligibility purposes, including:

  • The home, as long as applicant, spouse, or minor or disabled child is living there;
  • One automobile, regardless of value; and
  • Tangible Personal Property (i.e. contents of home).

6. How much is the Community Spouse Resource Allowance (CSRA)?

CSRA is ½ of the countable resources, subject to the following:

  • Minimum CSRA is $24,180
  • Maximum CSRA is $120,900

7. What are the Medicaid eligibility rules regarding Income?

Medicaid recipient keeps $40/month of his or her own income.

Institutionalized Spouse (IS) is income eligible if his or her income is less than $2,205/month, or less than the total monthly cost of his or her medical expenses (including nursing home, in-home care, prescriptions, premiums, etc.).

Community Spouse keeps all of his or her income, and may receive portion of income from the IS, if CS income is less than $2,030.00.

8. Can I give away assets in order to become eligible for Medicaid?

As a general rule, uncompensated transfers (i.e. gifts) by either spouse during the “Lookback Period” may cause period of ineligibility.

For all transfers on or after 2/8/06, there is a 60 month Lookback Period. In other words, at the time of application for Medicaid long-term care, the applicant will be required to disclose all uncompensated transfers made during the previous 60 months.

9. How does Medicaid penalize uncompensated transfers?

The penalty is one month of ineligibility for every $5,933 given away during the lookback period.

The penalty period begins after the application is filed and all other eligibility criteria are satisfied.