Medicaid will pay for medically necessary care in skilled or intermediate care nursing homes. Medicaid is jointly funded by the federal and state governments, and individual states have their own methodologies for administering their Medicaid programs. To be eligible for Medicaid benefits, the applicant must fall within specified residency, income, and available resource limits. The available resource limit is very low. Currently, most states’ Medicaid resource limit is $2,000 for a single person.
Available resources are those resources that the applicant could quickly convert to cash to meet her needs. For example, assets in a revocable trust created after August 10, 1993, would likely count as an available resource unless the applicant could show undue hardship.
There are available resources that are not counted towards the limit. An applicant’s home is not included in the resource calculation if she declares her intent to return to the home in writing. Personal items and household goods up to a specified current fair market value are also not counted. Burial plots for the applicant and her immediate family are excluded. Funds dedicated for burial expenses are excluded up to $1,500. Life insurance policies meeting certain criteria are also excluded. Wedding rings are not considered. Vehicles that are not needed for the applicant’s medical care or employment or for a family member’s employment are exempt up to a designated current market value. Property of a business or trade needed for self-support is also exempt. Some states disregard long-term care insurance policies in the resource calculation.
A trust that has been funded by third parties to supplement the applicant’s needs over and above Medicaid benefits is generally not considered income attributable to the applicant. Some states may allow an applicant to reduce her available resources by paying for incurred medical expenses. Generally, irrevocable trusts in which the applicant cannot reach the assets for her personal use and/or benefit are not counted as an available resource. Supplemental needs trusts for disabled individuals are also not considered as an available resource. In some cases, qualified income trusts may be excepted from the Medicaid trust rules.
Copyright 2011 LexisNexis, a division of Reed Elsevier Inc.