When one discovers that Medicare does not cover non-medical expenses such as home care for seniors and only covers up to a limited amount of time in a nursing home, it is common to see what other financial assistance programs are available. People will often think of Medicaid next, perhaps due to its similar sounding name. While Medicaid can be helpful and does cover some non-medical long term care expenses, the federal assistance program for low income elders and the disabled can, at first, appear complex and confusing.

The work of determining whether Medicaid may be an option that can help typically falls to the family caregivers. Among all of the other stresses of care giving, figuring out Medicaid should not be one of them. This post aims to clarify the large assistance program and offer a plain language explanation of the benefits available. Of course, for those interested in researching further beyond this basic primer, there are links at the end and throughout to sites where more information is found.

How Is Medicaid Structured

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Medicaid is actually the name for several programs. Adding to the complexity, every state has different names for their versions of the Medicaid programs. Federal and state moneys are made available to state programs to use according to program guidelines. Medicaid programs offer medical care and support services (non-medical care) for those who qualify. Medicaid pays nearly all of the costs of long term care and support for those who successfully apply and fall within the criteria.

Medicaid offers long term care benefits both in an institutional setting and through its Home and Community Based Services. Also called Medicaid Waivers, Home and Community Based Services are designed to help people afford to age at home and avoid having to live in a nursing home. While the benefits from Medicaid that provide nursing home care are considered entitlements, which are required to be provided to all who met the qualifications, Medicaid Waivers, in contrast, are limited by the funding allocated and often have long wait times for benefits to begin.

Medicaid Waivers can be directed towards the cost of home care, assisted living, adult day care, home modifications, or home medical equipment. One Medicaid Waiver is referred to generally as “Cash & Counseling.” Available in most states, Cash & Counseling offers qualifying individuals the choice to determine how best to spend the funds available for their care. Under these Waivers, it is possible to hire a family member as a home care provider.

Qualifications for Medicaid

Medicaid is specifically for low income seniors and disabled individuals who cannot care for themselves. The eligibility requirements vary by state and which program or waiver one is applying for. There are both financial and medical criteria that must be met.

Broadly speaking, under the medical requirements, if the person is not able to care for him or herself, they qualify. The Activities of Daily Living is a list of everyday tasks that program administrators use to determine whether and how much care a person needs.

In order to qualify financially, an applicant must meet both an income and a resource or asset limit. The numbers vary in each state, of course, and states take two different paths in how they set their financial requirements for Medicaid.

So called ‘Income Cap’ states establish a cap on the income that the recipient can make at no more than three times the amount of the Supplemental Security Income monthly disbursements, while ‘Medically Needy’ states look at whether the individual can afford their care given how much income they have. Medically Needy states require the recipient to ‘spend down’ their income until they reach a set amount, at which point, Medicaid covers the rest. Find out which type of state you live in.

Medicaid programs additionally set limits on the total amount of resources that the applicant has apart from the income requirements. Most say that the applicants should not have more than $2000 in ‘countable’ assets. This definition of assets excludes the applicant’s home and many personal possessions.

During the Medicaid application process, staff will examine past gifts or ‘transfers’ from the applicant to members of their family or others, so it is not advisable to simply gift away money to reach the financial limits. Instead, if the applicant is a little over the limits, consider working with a Medicaid planner who can help families to structure their resources and prepare their application. In addition, local Area Agencies on Aging (AAA) specialize in helping elders to understand and apply for benefits for free. Search for your local AAA.

How to Apply for Medicaid

You can make an application as well as get additional information in your state Medicaid office or on their website. For a list of the Medicaid offices, go to this page. Applications take between a month and a half to three months to be processed, depending on whether there’s a disability that needs to be assessed.

Where to Find Out More

The American Elder Care Research Organization maintains the website PayingForSeniorCare.com, where readers can find much more information about Medicaid, the state specific programs, and how to fund elder care and to save on expenses. Many visitors find the Eldercare Financial Assistance Locator to be an invaluable tool for saving time and discovering new programs that can help cover the cost of care.

Written by Miguel Guerrero
Miguel Guerrero is Director of Client Benefits at the American Elder Care Research Organization. The organization is dedicated helping families find the means to pay for senior care by providing objective information and interactive tools on its ad-free, easy to use and comprehensive website, http://PayingForSeniorCare.com. In this role, Miguel researches and writes about elder care financial assistance programs and cost saving technologies for the organization’s website and the blog, http://EldercareResource.blogspot.com.

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  1. Ok, here goes…. Once again, another well-intentioned article about decoding the Medicaid application process. It’s not that simple or that easy. I’m past that 2 month mark with my mother, and still no answer. And how long will that $2000 last? About 4 months. Then what? That $2000 is gone. I’m not drinking your Kool-Aid. I hope you have helped real people get through this process successfully. I can tell you that there are no clear guidelines and not everyone is treated equally. And Medicaid ‘staff’ are making assumptions based on their opinions, and not trying hard enough to get the facts correct. Applicants need a clear set of guidelines and a clear list of documents required for the application. Alzheimer’s is a huge burden already, so why not fix it now, before it gets so big it can’t be fixed. Or, are we there already….



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