Quick question on Medicaid income limits

TheCatWantsOut

I spoke to an Elder Care Attorney who was emphatic about setting up an Irrevocable Trust for Mom's house so that, after the 5-year look-back window, it will not need to be "spent down" to apply for Medicare. That seems reasonable. But I'm confused about Mom's eligibility based on income.

In Mom's state, it appears that Medicaid income eligibility is 138% of the Federal Poverty income level, which comes out to $20,140 per year. Mom's income between Pension and Social Security is about $40,000 per year. So based on income, she will never qualify for Medicaid. Do I have that correct? If so, then the irrevocable trust doesn't make sense to me.

odowd

This stuff is so confusing and varies so much by state, it's the reason we have to rely on elder law attorneys! Yours should have the right answers for your state, but typically homes are exempt from the asset valuation. However, once your parent passes, Medicaid will try to recover care costs from the estate, which includes the house unless it's protected. My mom is in Michigan, a state that has Lady Bird deeds, so that was all we needed to protect the house after she passes.

As to the income limits, again this varies by state, but long-term Medicaid income limits are generally higher than regular Medicaid. And if your mom is over the income limit, there are usually ways to qualify anyway if the difference between income and income-limit is spent on medical expenses. Think of it like a deductible that you must spend each month before the Medicaid coverage kicks in.

I found this site especially useful when navigating these issues.

Quilting brings calm

There are two different forms of Medicaid. One form is living outside of a long term care facility, and getting things such as doctor visits, therapy, a visiting nurse paid for. That’s the one that you’ve seen the income limits for.

The other one is most likely what your lawyer was discussing when he wanted you to see about a trust. That form is called institutional Medicaid, the income limits are different and a spouse get consideration. If your mom was moved to a long term care facility ( certain states include MC in that, others just nursing homes), then Medicaid would essentially pay the difference between her monthly income and the nursing home cost. Any assets would need to be sold and used for her care, unless a certain type of trust was in existence. If she gives away assets within five years of her entry into long term care, Medicaid expects that to be returned ( or it somehow delays when Medicaid begins paying)

In addition, her spouse( is there is one) would get to remain in the home, keep a car, furnishing, and possibly get to retain part of her monthly income. There’s a minimum income level that a spouse is allowed in order to live ‘a dignified life’.

towhee

The site that odowd mentioned is very good. I would read everything on there. This is another good site https://www.medicaidlongtermcare.org/. The problem with all of these strategies is that after you implement them you need a period of time before your LO needs care in order for you not to violate the lookback period, as putting the home in a trust is considered the same as a gift. Usually when people use these strategies their LO is physically healthy or has enough income and assets to pay for care during the lookback period.

TheCatWantsOut

Thank you! That is such a helpful website. Now I think I get why the lawyer was somewhat dismissive of income eligibility. In most states, it seems they have a program whereby you pay nearly all of your income to medical expenses, which in this case would be the nursing home, and Medicaid pays the balance. That actually makes sense.

TheCatWantsOut

https://alzconnected.org/discussion/comment/169648#Comment_169648

Got it. I had not heard of Institutional Medicaid before. The difference isn't quite enough in Mom's case to matter, but it is good to know that the limits are different.