When a chronic condition or disability leaves a loved one unable to manage his or her own day to day care, most families will start looking at long-term care options. But nursing homes and assisted living facilities can be expensive. The high price tag attached to these services may leave you wondering, "Does Medicaid cover long-term care?"
In this blog post, I will review the Medicaid regulations relating to long-term care including both medical treatment and residential services in assisted living facilities. I will also explain how an estate planning attorney can help you prepare to cover costs that Medicaid does not.
Medicaid, a joint federal and state government program, does provide benefits for long-term care in nursing homes and in-home care services, but only if you qualify. If you hope to make Medicaid cover long-term care for your loved one, the first question will be whether he or she meets the means test to receive benefits.
When you apply for Medicaid benefits for yourself or a family member, a caseworker will review the person's "countable assets" to see if they fall below the $2,000 threshold. It is important to note that this threshold is for an individual applicant. Married applicants have different qualifications that are outside the scope of this discussion. The $2,000 threshold includes almost everything a person owns and any income the person receives. However, Michigan Medicaid law allows for some exceptions, including, but not limited to, the person's home, one vehicle, personal items like clothing and jewelry, a prepaid funeral, and certain special needs trusts.
If you or your loved one is eligible, you will receive a Medicaid Program Eligibility Notice. This letter will indicate that the person is eligible, the effective date of eligibility, and the amount of any patient pay amount, which is based upon income and certain allowable expenses.
Once a person qualifies, he or she can have Medicaid cover long-term care by applying for those benefits. Michigan Medicaid will pay all nursing home costs, except the patient's portion, which is based upon the patient's income. You may also file an application for retroactive benefits for up to three months of past expenses.
Medicaid covers many of services, but that doesn't mean your providers must accept the payments. Before you commit to a nursing home, ask your long-term care facility if it accepts Medicaid benefits. If it does, you will only have to pay the patient's portion. The facility should bill Medicaid for the rest directly. But if your facility does not accept Medicaid you could face far more expenses.
Given the limits on assets and means testing, some older adults wonder if they can have Medicare cover long-term care instead. Medicare is a federal program that covers hospital and medical expenses for people over age 65, or who meet certain disability standards. However, Medicare coverage of long-term care is limited to certain step-down services. Medicare generally only covers skilled care in a nursing home facility for a limited period after a hospital stay of at least 3 days. It will pay 100% of your care for 20 days after you are discharged from the hospital, but only partial coverage for days 21 - 100. After that, you will need to use Medicaid to cover your continuing long-term care needs.
Getting Medicaid to cover long-term care is often a matter of preparation. To qualify for Medicaid benefits, many people must spend down or transfer assets. However, doing so improperly could subject you to penalties, and cause the assets to still be counted for Medicaid purposes. If you are considering using Medicaid to cover your long-term care costs, you should meet with a skilled elder law attorney early in the process. They can assist you in structuring your assets to pass the Medicaid means test, without limiting your loved one's quality of life.
Rebecca J. Braun, J.D., is an estate planning and elder law attorney for Mobile Legal Services, PPLC, in Southeast Michigan. She can help with estate planning and trust administration. She will travel to clients, free of charge, in Livingston, Oakland, Washtenaw, Wayne, and Southern Macomb Counties. Contact us for an initial assessment.