In a prior post in the Elder Law Basics post, I explained the difference between Medicaid and Medicare. For elder law purposes, the main distinction is that Medicaid pays for long term care services whereas Medicare provides traditional health insurance and only pays for short-term nursing home stays. In this post, I’m going to address what makes a person eligible for Medicaid, or as we call it in Minnesota, “Medical Assistance.”
First, it’s important to understand that there is a distinction between income-based Medical Assistance (MA) for low-income adults and MA for long term care (MA-LTC). Qualifying low-income adults and children may receive health insurance benefits through MA and there is no asset limit to qualify. But if you have a disability and need a nursing facility level of care either in a skilled nursing facility, assisted living facility, or at home, then income-based MA will not cover what you need. In that case, you need MA-LTC or what is referred to as a “waiver program.”
MA-LTC covers long term care services, which are skilled nursing services offered in a traditional nursing home setting. “Waiver programs” cover the same services, but in a community-based setting, such as assisted living facilities, memory care facilities, or at home. There are several different waiver programs offered in Minnesota for various needs, including the Community Access for Disability Inclusion (CADI) waiver for persons with disabilities under age 65 and the Elderly Waiver (EW) for disabled persons 65 and up. The financial eligibility rules for MA-LTC and all waiver programs are substantially the same even though each program is designed for people with different needs.
For MA-LTC and all waiver programs, there is an asset limit for both the person receiving benefits and their spouse, if they are married. For the person receiving benefits, the asset limit is $3,000. This figure has not changed in many years, and seems unlikely to change soon. For the person’s spouse, they are limited to $126,420, but unlike the MA recipient’s asset limit, the spousal asset limit is adjusted annually for inflation. Certain assets do not count toward either spouse’s asset limit, including their primary residence, one vehicle, and personal belongings (like clothing, electronics, furniture, etc.). All other property, however, does count toward the asset limit, including retirement accounts (IRAs, 401(k)s), most trust accounts, and all other real estate (farmland, cabins, etc.).
In addition, the MA recipient’s income is calculated and contributed toward the cost of their care, with certain limited exceptions, such as a personal needs allowance ($102 per month), and in some cases additional income may be given to the spouse to cover excess housing costs. The income calculation for waiver programs can be quite complicated, and some people may not qualify for a waiver program if their income exceeds their care costs. But the spouse of an MA recipient is not required to contribute their income for the MA recipient’s care, in other words, there is no “spousal income deeming” for MA. This makes possible certain asset protection strategies such as planning with Medicaid-compliant annuities.
In addition to the basic financial eligibility requirements, the MA applicant must meet additional criteria based on their needs. For example, they must require a nursing home level of care, which means they typically must be evaluated by a public health nurse as part of what is called the MNChoices Assessment. And for MA-LTC or MA-EW, they must be 65 and older; or, for CADI they must be under 65.
These are just the most basic elements of eligibility and because every person’s situation is different, even though you or your loved one may meet these basic criteria, there may be other considerations before you or your loved one should apply. For example, you may be ineligible for benefits if the applicant or their spouse gifted assets within the last five years. There are also special asset limit rules for families that own small businesses or farms. If you are looking for more information about qualifying for MA, please contact me to discuss your situation.