By Nancy J. Brady, RN, Esq. And Linda Faith Marshak, Esq.
Financing Long Term Care: Nursing Home Medicaid
The average cost of nursing home care in New York City and the five boroughs is determined by Medicaid to be about $8900 per month. Many nursing homes cost even more than that, depending upon various factors. Medicare benefits do not pay for long term nursing home care, and in fact, Medicare benefits often will not pay for even a short term stay in a nursing home. If Medicare does not cover the nursing home stay, or if Medicare benefits are exhausted, one has several choices- to pay “out of pocket”, use long term care insurance if available, to be discharged, or to apply for Medicaid, if eligible. This article will give a brief overview of some of the Medicaid eligibility rules in New York State as they apply to nursing home benefits.
First, let’s review the Medicare nursing home coverage which may be available. Medicare is available to individuals over age 65, and certain disabled individuals, regardless of financial status. In order for Medicare to pay some of one’s nursing home bill, a consecutive three day hospitalization within thirty days of nursing home admission is required. In addition to the three day qualifier, one needs to meet the “skilled needs” requirement. This means the individual must need the services of a licensed health professional, and have the potential for health improvement within the Medicare guidelines. Once the individual has either stabilized, or is no longer improving, Medicare will stop paying the nursing home bill. Very little notice will be provided, so plans for alternative payment of the nursing home bill should be made well in advance . Even if one meets the Medicare qualifications, Medicare covers a maximum of 100 days- full coverage for the first twenty days, and partial coverage for the next eighty days.
When Medicare no longer covers the nursing home bill- whether it’s day one of the nursing home admission, or day five, or one hundred- the nursing home wants to know who will be paying the bill.
Medicaid or Medical Assistance is a “means tested” program, and certain financial eligibility requirements must be met in order to qualify. Individuals can have a maximum of $4000.00 in total assets in order to be eligible. This amount includes all financial assets, including real estate. Even assets that are held jointly with another individual are counted towards the $4000.00 total. The application for nursing home benefits must include thirty six months worth of financial information (sixty months worth for trusts) for the period of time immediately prior to the Medicaid application. This is known as the look back period. All transfers of assets during this look back period must be accounted for in the application. However, the fact that transfers of assets have taken place does not necessarily mean the individual is ineligible for Medicaid. Certain transfers are exempt, or do not count toward eligibility. Enough time may have passed since asset transfers even if they have been made place during the look back period. Any individual who needs nursing home care should consult with an attorney who is familiar with the transfer rules as soon as possible to determine how much, if any, of their assets are or can be protected in the event a Medicaid application is required.
Certain rules apply when the Medicaid applicant owns a home. One can apply for and receive Medicaid when he or she owns a home, however Medicaid can choose to place a lien on the home to be reimbursed once the recipient has passed away, to the extent that Medicaid has paid for the individual’s care. It is therefore advisable to transfer the home prior to applying for Medicaid benefits. The home can be transferred to several individuals without penalty- including a spouse, disabled child, minor child, caretaker child who has lived with them for two or more years immediately prior to the nursing home admission, or a sibling who has an equity interest in the home, and has lived with them for one or more years immediately prior to the nursing home admission.
Keep in mind, this is a very brief synopsis of the Medicaid eligibility rules. We have not addressed the rules as they apply to spouses, or how the applicant’s income is affected. There is a lot of misinformation regarding the Medicaid eligibility rules, and how they are applied in different situations. While the staff in the hospital or nursing home can be quite helpful, they cannot and should not provide advice regarding asset transfers. If you or a loved one requires nursing home care, even for the short term, an attorney should be consulted as soon as possible to determine the best way to proceed to obtain Medicaid benefits.
For further information, contact Nancy Brady and Linda Marshak at (718) 945-1515.