LTC Medicaid - Frequently Asked Questions
LONG-TERM CARE MEDICAID - Q & A
Long-Term Care Medicaid (LTC MA) is government paid assistance, regulated by the state, implemented by the County, that helps people with low income and assets pay for long-term care services, at home or in a nursing facility. Applicants must qualify, and there is a 5 year look-back of all financial activity, prior to acceptance into the program. Below are many of the commonly asked questions when applying for LTC MA coverage.
1 ► How does LTC Medicaid Work?
Once the need for LTC Medicaid is determined, and you medically and financially qualify for State funding, then your monthly income will be due to the Nursing Facility (NF), less health insurance premiums and a $45 monthly allowance for personal needs (referred to as the resident's "income liability"). The balance of the nursing home expense (after your income liability is paid) will be covered by Medicaid. However, if there is a spouse in the community and they require the applicant's income to cover expenses, they may qualify for a spousal allowance.
If you qualify for the "Aging Waiver" (in-home care), you can keep your income. However, there are income limits when qualifying for the Aging Waiver.
2 ► How much does Long Term Care cost?
The average daily private pay rate for a double occupancy room is estimated at $420 per day (approx. $12,800 month) [2023].
3 ► How much of my nursing facility expense will Medicaid cover, if I qualify?
Medicaid will pay the balance of the NF's monthly expense, including prescription expense, after the resident's income liability and any required "spend-down" of assets are deducted. Included with Medicaid coverage are 6 hair cuts per year (provided by NF), but not TV, cable or telephone expense.
4 ► How do I know if I qualify for Medicaid?
MA qualification is based on two factors: Medical Need and Financial Need.
To qualify Medically the applicant must be assessed as "medically needy" for either short-term or long-term care by the Department of Aging and Adult Services (AAA). This is done by completing a medical evaluation signed by the resident's primary care physician and reviewed and approved by a AAA caseworker (the nursing facility will coordinate this assessment).
To qualify Financially the applicant must be confirmed "financially needy" by the County, which is based on income, assets and subject to a 5 year financial history review mandated by the County Assistance Office.
5 ► How much of my savings can I keep?
The allowable asset limit is based on your gross income….
If monthly gross income is $2,742 or less [2023] = $8,000 maximum asset limit
If monthly gross income is $2,743 or more [2023] = $2,400 maximum asset limit
6 ► What if I have more savings than the allowable asset limit?
A qualified spend-down must be completed until the maximum asset limit is reached...
$50k savings - $8k asset limit = $42k spend-down is necessary to qualify.
Note: If there is a spouse in the community there are other determining factors that can protect a a large portion of assets and income, if needed.
7 ► Will my spouse's savings be included too?
Yes, both spouse's assets are disclosed but only the community (at home) spouse's IRA accounts are exempt from the division of assets. The community spouse may retain a minimum of $29,724 [2023] or 50% of total assets (whichever is greater), up to a maximum of $148,620 [2023]. Any amount that exceeds $148,620 [2023] for the spouse's share of assets is subject to the MA spend-down requirement; however, there may be other options available for the community spouse to retain the majority of the assets.
8 ► Does my spouse's income factor into my MA qualification?
No, your spouse keeps all of their monthly income. However, if their income is not sufficient to cover current living expenses, then they may be entitled to receive a portion of the applicant's income up to $3,715 mo. [2023], referred to as the spousal monthly maintenance needs (MMN) allowance. Proof of need is required and only qualified home maintenance expenses will be considered when determining MMN.
9 ► What can I "spend-down" my savings on and still qualify for Medicaid?
Any money spent after the "need date" (retroactive Medicaid start date) can only be spent on medically related expense, nursing facility expense or placed in an irrevocable burial trust?
However, prior to the "need date" you can pay any legitimate expense if there is a spouse at home, or if you intend to return home. But no gifting is permitted. This means that as long as you don't require Medicaid coverage during the period of time you are spending the money, then you can continue to pay for any legitimate expense incurred. During this period there may be other opportunities to preserve assets, but strict regulations apply when allocating assets within the 5 year look-back period prior to qualifying for Medicaid, so you should seek advise from a professional educated in LTC MA regulations.
10 ► How much money can I put in a burial trust?
Amounts vary by County; approx... $22k Montgomery/$21k Bucks/$20k Lehigh [2023], and apply to both applicant and spouse. It must be an irrevocable burial trust with a funeral home or banking institution of your choice. This money can not be withdrawn until after the resident passes and may only be used on funeral/burial related expenses.
11 ► Can I keep my 401k, stocks, MM or CDs and still qualify for Medicaid?
All of your investments count toward your total "allowable asset limit". If your investments, combined with your total liquid assets are under the allowable asset limit, then you may keep them. However, if the combination of liquid assets and investments are over the allowable asset limit, then your investments must be liquidated and a spend-down must be completed before you can qualify for MA. Only the community spouse's retirement accounts are exempt, as well as investments generating a monthly income.
12 ► Can I keep my house and car?
Yes, one house and one auto is exempt from the total asset calculation, unless liquidated. However, they must be disclosed on the MA application and a copy of the deed and title must be provided. If there is no community spouse and the resident does not plan on returning home, the County will anticipate sale of the home and once sold the MA recipient will be disqualified from receiving Medicaid until another spend-down is completed and total assets are below the resource maximum for MA qualification.
13 ► Is Life Insurance considered an asset?
Yes, but only the "cash surrender value" (if the face value is over $1,500). That means that as long as the face value is $1,500 or less then it will not be considered as part of your total assets. However, any life policy with a face value over $1,500 and a cash value over $1,000 would be considered as part of your "total assets".
Note: The cash value is different than the face value of the policy (lower). This is the amount of money you would receive if you discontinued coverage and closed the policy. It is not the same as the amount payable upon death. (e.g. $20,000 Life Policy with a $5,000 cash value: $5k counted as part of your total assets.)
14 ► Why is there a 5 year look back of all financial history?
The State wants to ensure that there were no questionable activities during the 5 year look-back which may indicate that funds were gifted; that includes cash, investments, property and auto sales. It is only considered a valid transaction if "fair market value" is received for any asset liquidated or transferred to anyone other than the spouse.
15 ► What happens if there was gifting/asset transfers within the past 5 yrs.?
If there were large withdrawals ($500 or more) that can not be verified or reasonably explained, or if there were any investments, title or deed transfers without receipt of fair market value, then a penalty period may be instituted by the State. This means that the State will not cover your LTC expenses for the period of time (determined by the amount in question) that the "gifted" funds would have covered and you will be responsible for paying the full private pay amount incurred during this period. If it is determined that you can not afford to pay the private pay rate to the NF to cover the penalty period, then the resident may be at risk of being discharged from the nursing facility and collection proceeding will begin.
16 ► What documentation is required for the Medicaid application?
Please refer to the "List of Required Documents for MA Application" below.
17 ► How long does this process take and when will I know if I'm approved?
It could take a few months before we receive a determination of acceptance.
After the initial application review is completed and all required forms and consents are signed by the resident or POA, it may take several weeks to compile all the documentation required. It is the resident's/POA or family's responsibility to obtain support documentation.
Once the application is submitted, the County has 30 days to review and verify financial information. As a result of their findings, they may request additional documentation for specific items before they determine acceptance.
18 ► What happens if my MA application is denied?
If your application is denied, the County will list the reason/s. Typically, denials are due to either missing support documentation or newly discovered assets not reported on the original application.
Once a denial is received you can file an Appeal to keep the application open until the issues are resolved. Support documentation will need to be provided to the County for each item listed in the County's denial, in preparation for the scheduled hearing; at which time the Judge will decide the next course of action.
19 ► Once approved, how long will Medicaid cover my LTC expenses?
Your coverage will continue as long as you are in a LTC facility and are financially in-need of coverage. This coverage can be transferred to another nursing facility, as long as the resident wasn't discharged home. However, the County does require an annual renewal (a.k.a. redetermination) of financial need on the anniversary of your coverage. Current statements for all financial/investment accounts, including pension and annuities (unless previously documented as a "fixed, life time" income), as well as disclosure of any liquidated assets, must be provided to verify that the resident is still in compliance with the maximum asset limit. Once discharged home LTC Medicaid coverage will terminate or can be transferred to a LTC Waiver program (Aging Waiver) for part time care at-home.
20 ► Can I still continue to pay bills while in the process of applying for MA?
Once the effective date (beginning of coverage) for Medicaid is determined, any legitimate expense may be paid prior to that date (see #9 above); however, payments of $500 or more will require verification. After the start of the MA effective date (which may be retroactive), any expense paid that does not qualify as part of the spend-down (#9 above) will be deducted from your allowable asset balance ($8k or $2.4k bal., outlined in #5).
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LIST OF REQUIRED DOCUMENTS FOR MA APPLICATION
Below is a list of support documents required for the typical PA LTC Medicaid application for both applicant and spouse. There may be additional information required based on individual circumstances.
1 - IDENTIFICATION: Any available ID - Driver's License (current or expired) / SS, Medicare, Insurance cards, etc.. If applicable, Divorce Decree, spouse's death cert..
2 - POA/CONSENT: Provide copy of Power Of Attorney, Guardianship or Consent Agreements (if applicable).
3 - INCOME: Provide proof of income (i.e. Soc.Sec. Award Letter, Pension/Annuity Stmnt.), etc. that outlines gross vs. net income; copies of 1099s are acceptable.
4 - FINANCIAL STATEMENTS: Provide copies of financial statements for all accounts (active or closed) within the past 5 years (i.e. Bank accts., investment accts., retirement/IRA) including opening and closing statements, if account was opened or closed within the past 5 years.
Typically, the Counties only require 2 statements per year (ex. Jan/June) for the first 3 years of the look-back period, and all monthly statements for the past (most recent) 2 years. However, they can request additional statements, for any reason, during their review process.
5 - CHECK COPIES, SUPPORT DOCS.: Provide copies of cancelled checks and explanations for all transactions $500 or more (excluding income) reflected on the statements provided (#4 above). Include copies of contracts for payments to private parties (if applicable).
Note: A reoccurring expense over $500 only requires one copy of a current cancelled check (i.e. rent, mortg., utilities, insurance) as proof of routine expense.
6 - LIFE INSURANCE: Provide a current insurance policy statement listing current Face Value and Cash Surrender Values.
Note: $1,000 of life cash value is an allowable asset exemption, but still requires documentation.
7 - BURIAL TRUST: Provide a current statement from the bank or funeral home listing account balance and date established. Must be an "irrevocable burial" to qualify as an exempt asset.
8 - REAL ESTATE OWNED: Provide a copy of the Deed and estimated property value. If applicable, provide the names of individuals living on the property and their relationship to the property owner. If sold within the past 5 years, must also provide a copy of the settlement sheet.
Note: Ownership of a primary residence is an allowable asset exemption, but still requires documentation.
9 - AUTO/MOBILE HOME: If the title to a vehicle or mobile home is in the applicant's name, provide a copy of the Title and current value, along with proof of insurance coverage.
Note: Ownership of one auto is an allowable asset exemption, but still requires documentation.
10 - EXPENSES: If applying for a short term MA grant (less than 6 mos.) or if there is a spouse in the community (at home), provide copies of all monthly expenses; Mortg./Rent/Elec./Water/Sewer/Phone (basic)/Gas/Trash/Property Taxes/Home Insurance, to be considered for a home maintenance deduction.
Note: Applicants that are single and not returning home, do not qualify for a home maintenance deduction and copies of expenses are not required.
11 - FEDERAL TAX RETURNS: Provide copy of tax returns for the past 5 years, include copies of 1099s (if applicable). If no taxes were filed, a "non-filing" disclosure must be signed.
12 - HEALTHCARE PREMIUM INVOICE: If resident or spouse has a supplemental or managed Healthcare premium (other than regular Medicare), provide a copy of a recent premium invoice.
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