Financing Nursing Home Care
Ainer & Fraker, LLP — In our previous post entitled, Eldercare and Planning, we discussed the dynamics of Medicaid when it comes to providing medical support for elderly family members.
FINANCING NURSING HOME CARE — Generally, a nursing facility’s administration will help determine if the patient is eligible for Medi-Cal to pay the costs of the nursing home. If not, they can explain under what conditions the patient may become eligible in the future. The law requires that nursing home residents receive identical treatment regarding transfer, discharge, and provision of services regardless of the source of payment. A Medi-Cal resident can stay in any bed in a nursing facility.
Spousal Impoverishment Provision — Couples looking at nursing home placement for a spouse need to be aware of the special laws enacted that allow the spouse remaining at home to keep a certain amount of income and resources when the other spouse enters a nursing home. This is intended to prevent impoverishment of the spouse at home.
• Community spouse’s monthly maintenance needs allowance: The spouse at home may keep all of the couple’s income up to $2,739* per month. This is called the community spouse’s “monthly maintenance needs allowance”. Note: This amount is adjusted annually by a cost of living increase. The spouse at home may obtain additional income or resources through a “fair hearing”, or by court order. If the spouse at home receives income above the limit in his/her name only, he/she can keep it all (this is called the “name on the instrument rule”); however, he/she will not be allowed to keep any of the nursing facility spouse’s income. Income received by the nursing facility spouse will go to his/her share of cost. The spouse in the nursing home is allowed to keep $35 monthly for personal needs (“personal needs allowance”).
• Resources: The spouse at home can keep up to $113,640* in resources, and the institutionalized spouse may keep up to $2,000. (Different laws apply to spouses who entered a nursing facility before September 30, 1989. If this is the case, the individual should contact a lawyer/advocate knowledgeable about this area of the law.) Both separate property (i.e., from a previous marriage or inheritance) and community property that is not exempt are combined and counted at the time of application for Medi-Cal. Once the resource limit has been reached, all ownership interest should be transferred to the spouse at home. The institutionalized spouse’s $2,000 resource limit should be kept separately and accounted for separately.
*The values are periodically adjusted for inflation. The amounts listed were effective 1/1/2012.
TRANSFER OF ASSETS — Institutionalized Medi-Cal recipients or applicants who transfer non-exempt assets for less than fair market value during a 36-month “look back” period may be subject to a period of ineligibility. The length of the ineligibility period depends on the value of the transferred asset or resource and date of transfer period. The period of ineligibility begins on the date the transfer was made. The 36-month “look back” period begins when an institutionalized person applies for Medi-Cal or when a Medi-Cal recipient is admitted to a nursing facility. A 60-month “look back” period for assets from certain trusts is also required. Federal law amended trust regulations makes it more difficult to set up a Medicaid qualifying trust for eligibility and estate claims purposes. For a trust already established, it is recommended that an attorney review it.