Medicaid and the Elderly Poor
by Jeanne Finberg
Poor elderly people are eligible for Medicaid coverage of their health care needs when they fit within specific income and resource eligibility rules. Many middle-income people are eligible for Medicaid coverage of long-term care. Medicaid is the major source of payment for nursing home coverage because Medicare, the federal health insurance program for the elderly and disabled, covers limited days for long-term care, and few people have private long-term care insurance. Because the cost of nursing home care is so high, many middle-income people become Medicaid-eligible after several months of long-term care. Special protections for the spouses of nursing home residents allow them to keep reasonable amounts of income and resources when their spouses are institutionalized.
The National Senior Citizens Law Center provides technical assistance to attorneys and other advocates on Medicaid issues affecting the elderly. Common problems and issues that new attorneys address include rules on spousal impoverishment and transfer of assets, special eligibility groups such as Pickle people and Kennelly widows, home health care, trusts, estate recovery, and liens. For further assistance, see www.nsclc.org.
Spousal Impoverishment Protections. Congress enacted special protections for spouses of nursing home residents so that one spouse can become eligible for Medicaid long-term care without first spending down all of the couple’s income and resources./1/ The spouse at home is allowed to keep a minimum amount of resources, from $17,856.00 to $89,280.00, depending upon the state, and have a minimum monthly income allowance, from $1,454.25 to $2,232.00, at state option, for the spouse’s use in the community. States have some discretion in setting these amounts. But the federal statute sets the minimum and maximum amount, and the levels are increased every year./2/
Transfer of Assets. People who give away income or assets may be penalized by the Medicaid rules on transfer of assets. Transfers for less than fair market value within thirty-six months (sixty months for trusts) of an application for Medicaid long-term care are subject to a potential penalty period of ineligibility./3/ The period is calculated by dividing the uncompensated value of the asset by the average private pay rate for nursing home care in the state./4/ This determines the number of months that one is ineligible for Medicaid long-term care.
Pickle People and Kennelly Widows. A few groups of elderly people are eligible for Medicaid as a result of specific congressional enactments. One group, called Pickle people, not after the deli food but after the legislator who introduced the amendment to the Social Security Act, are people who received Supplemental Security Income (SSI) but lost it as a result of cost-of-living increases on their social security checks./5/ Another group is the Kennelly widows, who lost their SSI due to eligibility for early widow’s benefits under the social security survivors program./6/
Home Health Care. Medicaid is available for home health services under
- the mandatory home health services program,/7/
- or, at state option, under several home and community-based waiver programs,/8/ or
- other optional programs./9/
Ironically most of the Medicaid home health care in the country is provided through the waiver, rather than the mandatory programs. The most common waiver program serving the elderly is the waiver for elderly people who, but for the services, would be institutionalized./10/ Under a waiver program, certain requirements of the Medicaid program, such as statewideness or comparability, are waived, but the state must prove that the program will be cost effective./11/
Trusts. As a general rule trusts, except those created by will, may not be used to protect assets to qualify for Medicaid./12/ Limited exceptions to the trust rules allow for
- certain trusts for disabled people under 65,/13/
- income-only trusts in states without medically needy programs,/14/ and
- pooled trusts serving people with disabilities./15/
Estate Recovery and Liens. States are now required to recover from the estates of deceased beneficiaries benefits paid for nursing facility services, home and community-based services, as well as related hospital and prescription drug benefits.16 They are permitted to recover other Medicaid benefits as well. Recovery is made from the probate estate as defined by state law, but this can be defined expansively./17/ No recovery may be made until after the death of a surviving spouse or a dependent or disabled child./18/ Liens may be placed on property for benefits that were incorrectly paid, or on the real property of a permanently institutionalized person./19/ But numerous exceptions apply, protecting surviving relatives./20/
Jeanne Finberg is a staff attorney,
94612; 510.663.1132; jfinberg@nsclc.org.
1 42 U.S.C. § 1396r-5.
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3 42 U.S.C. § 1396p(c).
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5 See also Questions You Always Wanted to Ask, in this manual.
6 42 U.S.C. § 1383(c).
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11 42 U.S.C. § 1396n(c); 42 C.F.R. § 441 subpart G.
12 42 U.S.C. § 1396p(d).
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