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Medicaid Planning
When a family member is or may be unable to live independently there are a myriad of financial and personal questions that arise, almost immediately.
Is home care an option? Who provides it? How much does it cost? Can we get any help with the costs?
If home care is not an option, how does the family choose a nursing home? How much does it cost? Does Medicaid or other insurance cover the cost? If not, how does the family pay for it?
The legal issues involved in Medicaid eligibility planning are complex and multi–dimensional. They require an analysis of both state and federal law. In addition to familiarity with the United States Code, the Connecticut General Statutes, the Code of Federal Regulations and the Department of Social Services’ Uniform Policy Manual, Medicaid eligibility planning requires attention to gift tax issues, income tax issues, common law contract issues, probate administration issues, and statutory and common law transferee liability issues.
State and federal Medicaid eligibility planning differs depending on whether the potential applicant is a single person, on the one hand, or a person with a spouse still living in the community, on the other hand. That is because the Medicaid eligibility rules for a single person are different from the Medicaid eligibility rules for a married couple.
If the potential applicant is a single person, assets owned by the potential applicant must be “spent down” to $1,600.00 before eligibility for Medicaid can be established. There are a variety of ways to “spend down” in a manner that directly or indirectly benefits the family of the applicant. The specific strategies employed in each instance are unique and individualized. They always depend upon the wishes of the potential applicant, the dynamics of the family, and the nature, type, and extent of the assets and income of the potential applicant.
If the potential applicant is married and has a spouse still living in the community, the family home is an excluded asset. Literally, this means that ownership of the home does not affect eligibility for Medicaid. The same is true for one motor vehicle. It, too, is considered an excluded asset.
In addition to excluded assets which can be owned by the community spouse, a portion of the couple’s non–excluded assets also are protected for the community spouse. The technical term for the amount of non–excluded assets that is protected for the community spouse is the Community Spouse Resource Allowance. The acronym “CSRA” often is used. The CSRA is ½ of the couples’ non-excluded assets, but subject to a maximum of $101,640.00. and a minimum of $20,328.00. The maximum and minimum increase every January 1.
Medicaid eligibility planning sometimes involves making one or more transfers of assets, as gifts, to children of the potential applicant. In most instances a transfer of this nature creates a period of Medicaid ineligibility, called a penalty period. Special rules, however, allow for the penalty free transfer of the family home in several circumstances.
Medicaid eligibility planning requires a careful analysis of the elder generation parents’ sources and amounts of income, and, as well, of the nature, value, and method of ownership of all of their assets. At the same time, Medicaid eligibility planning requires a patient, careful, skillful, and sensitive listening to the wishes of the elder generation parents for each other, their wishes for their children, and their assessment of their children’s ability to work together and carry out those wishes.
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