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When Will Medicaid Pay for Nursing Home Care?

Dear Savvy Senior: What are the eligibility requirements to get Medicaid coverage for nursing home care? — Caregiving Daughter

Dear Caregiving: The rules for Medicaid eligibility for nursing home care are complicated and vary according to state. Here’s a general rundown.

Medicaid eligibility

Medicaid, the joint federal and state program that covers health care for the poor, is also the largest single payer of nursing home bills for seniors.

Most people who enter nursing homes don’t qualify for Medicaid at first, but pay through long-term care insurance or out-of-pocket until they deplete their savings.

Most states require that a person have no more than about $2,000 in countable assets that include cash, savings, investments or other financial resources.

Assets that aren’t counted include their home if it’s valued under $560,000 (up to $840,000 in some states), personal possessions and household goods, one vehicle, prepaid funeral plans and a small amount of life insurance.

While your parent’s home is not considered a countable asset to determine eligibility, if he or she can’t return home, Medicaid can go after the proceeds of the house to reimburse nursing home costs, unless a spouse or other dependent relative lives there.

After qualifying, all sources of your parent’s income such as Social Security and pension checks must be turned over to Medicaid to pay for care, except for a small personal needs allowance — usually between $30 and $90.

You also need to be aware that your parent can’t give away assets to qualify for Medicaid. Officials will look at financial records going back five years to root out suspicious asset transfers. If they find one, Medicaid coverage will be delayed, according to a formula that divides the transfer amount by the average monthly cost of nursing home care.

So if, for example, your parent lives in a state where the average monthly nursing home cost is $5,000 and gave away cash or other assets worth $50,000, he or she would be ineligible for benefits for 10 months ($50,000 divided by $5,000 equals 10).

Spousal protection

Medicaid also has special rules for married couples when one spouse enters a nursing home and the other spouse remains at home. In these cases, the healthy spouse can keep one half of the couple’s assets up to $120,900 (varies by state), the home, all furniture and household goods and one automobile. The spouse is also entitled to keep a portion of the couple’s monthly income — between $2,333 and $3,022. Any income above that goes toward the cost of the nursing home recipient’s care.


Jim Miller is a contributor to NBC-TV’s “Today” program and author of “The Savvy Senior.” Send your questions to Savvy Senior, P.O. Box 5443, Norman, OK 73070; or visit savvysenior.org.


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