Income limits and asset restrictions. Eligibility requirements and spend-down strategies. Planning for long-term care for yourself or a loved one can feel confusing and overwhelming, especially when Medicaid rules for long-term care enter the picture.
How do you know if you qualify, and what happens if you don’t?
Here, Legacy Navigation’s team of professional Certified Medicaid Planners™ breaks down the essentials of Medicaid’s role in funding long-term care, how long and how much Medicaid pays for long-term care, and some of the criteria that impact eligibility.
Table of Contents
- Understanding Medicaid’s Role in Long-Term Care
- How Long Does Medicaid Pay for Long-Term Care By Care Type? 4 Core Criteria
- How Long Does Medicaid Pay for Long-Term Care By Care Type?
- Commonly Asked Questions About Medicaid’s Rules for Long-Term Care
- Legacy Navigation: Professional Medicaid Planning Services for Long-Term Care
Understanding Medicaid’s Role in Long-Term Care
Up to 70% of adults age 65 and older develop the need for long-term services and support before they die and 48% receive some paid care over their lifetime.
This assistance often comes with a hefty price tag.
The average annual cost for nursing home care can top $130,000, home health services can reach $79,000+ annually, and adult day care can cost approximately $100 a day.
For U.S. seniors, Medicaid is the primary payer for long-term care, covering both institutional nursing homes and community-based services.
Medicaid is essential for long-term care for two key reasons:
- Private health insurance and Medicare provide little to no coverage for ongoing daily needs, leaving millions of seniors and individuals with disabilities to rely on Medicaid to pay for their essential living and medical care.
- Long-term care is extremely expensive, often resulting in annual costs of tens of thousands of dollars, leaving Medicaid to function as a financial safety net for most American seniors.
If you’re unsure about your eligibility for long-term care or need assistance with Medicaid planning, the Certified Medicaid Planners™ at Legacy Navigation are here to help. With 40+ years of combined experience in the healthcare industry, our clinical background allows us to provide holistic Medicaid planning, including a physical, financial, and psychosocial assessment.
Contact our experienced team today for a free consultation.
How Long Does Medicaid Pay for Long-Term Care? 4 Core Criteria
#1: Medical Necessity
To qualify for long-term Medicaid coverage, individuals must demonstrate the need for nursing-home level of care. This generally means requiring daily, hands-on help with two of the six activities of daily living (ADLs), which include:
- Bathing: Cleaning the body and performing basic grooming
- Eating: The ability to feed oneself without assistance
- Transferring: Being able to move from a bed to a chair or wheelchair
- Toileting: Getting on and off the toilet and maintaining good hygiene
- Continence: Controlling bowel and bladder functions
- Dressing: Putting on and taking off clothes without struggling with fasteners
They may also qualify if they require supervision due to cognitive impairment or dementia.
#2: Income Limits
Medicaid recipients generally must contribute the majority of their monthly income toward their care costs (known as “patient liability”), while retaining a small Personal Needs Allowance.
While the threshold varies by state, in general, an individual must make under $2,000 per month.
If their income exceeds the limit, their state may allow them to “spend down” excess medical expenses or place their income into a Miller Trust (sometimes referred to as a Qualified Income Trust) to maintain eligibility.
#3: Asset Limits
Countable assets include:
- Checking accounts
- Savings
- Stocks
- Secondary properties
In most states, these must remain below $2,000 for a single person, with married couples applying together generally having a limit of around $3,000 to $4,000.
Non-countable, or exempt assets that generally do not count toward this limit include:
- Your primary residence (up to a certain equity value)
- One vehicle
- Household goods
- Prepaid burial plans
#4: 5-Year Look-Back Rule
To prevent applicants from giving away their money or transferring assets to qualify for Medicaid, a 60-month (5-year) look-back period is enforced, which includes:
- Penalization of any assets sold or gifted for less than fair market value during the 5 years prior to application
- A set period of ineligibility (calculated by dividing the value of the transferred assets by the average monthly cost of nursing home care in the home state) during which the applicant must pay out-of-pocket.
How Long Does Medicaid Pay for Long-Term Care By Care Type?
Medicaid Coverage for Nursing Home Care
There are two types of nursing homes covered by Medicaid:
- Skilled nursing: These are services provided in a nursing home facility, and include care by registered professional nurses, room and board, physical therapy, occupational therapy, speech therapy, social services, medications, supplies, and medical equipment.
- Long-term care: This encompasses services for patients who need around-the-clock care due to a mental or physical condition.
Nursing home coverage through Medicaid is ongoing for as long as the patient requires that level of care and financial eligibility is maintained.
Medicaid Coverage for Assisted Living
For assisted living, Medicaid coverage won’t pay for room and board, but it does cover:
- Personal care assistance, including bathing and dressing
- Medication management
- Nursing services
- Specialized memory care, on occasion
As long as an individual continues to meet the functional and financial eligibility requirements, Medicaid will pay for assisted living services indefinitely.
Assisted living is funded through Medicaid’s Home and Community-Based Services (HCBS) Waivers that come with specific local guidelines and conditions, including:
- Age and disability: You must be 65 or older, or be an adult (18–64) with a medically recognized disability.
- Level of care: You must pass a state assessment proving you require a nursing facility level of care that may include assistance with ADLs, and a cognitive impairment that requires continuous supervision, such as Alzheimer’s or dementia.
- Financial limits: You must meet a specific monthly income and be within the parameters for asset limits, (generally around $2,000 for an individual).
- Residential and service rules: You must choose to reside in a licensed assisted living facility or residential care facility that participates in Medicaid waiver programs.
Medicaid Coverage for Home and Community-Based Services (HCBS)
HCBS waivers allow states to provide long-term care for eligible seniors while allowing them to remain in their homes.
The waiver eliminates certain Medicaid requirements, allowing these services to be covered when they would not be otherwise.
Services that may be included are:
- Case management
- Personal care
- Homemaker services
- Respite care
- Home health
- Adult day programs
For most applicants, a waiver is usually approved in three-year intervals. Individuals who qualify for both Medicaid and Medicare or are already dually enrolled can have waivers approved for five-year periods.
Medicaid Coverage for Aged, Blind, and Disabled (ABD)
ABD Medicaid is a program for individuals who are 65+, legally blind, or who are considered disabled, but who also meet the income requirements.
While the average monthly income and asset limits vary by state, ABD Medicaid can be used for long-term care, including nursing homes and home and community-based waivers.
Navigating these programs effectively can be tricky, and professional guidance is often essential for understanding eligibility and coverage requirements. The Certified Medicaid Planners™ at Legacy Navigation are here to support and bring clarity to the application process. Contact us today for a free consultation.
Commonly Asked Questions About Medicaid’s Rules for Long-Term Care
Can a Married Couple Protect Assets If One Spouse Needs Nursing Home Care?
Yes. Medicaid includes spousal impoverishment protections that allow the healthy spouse to retain certain income and assets while the other spouse receives long-term care benefits.
What Are Some Circumstances That May Cause an Individual To Lose Medicaid Coverage?
You may experience the loss of Medicaid benefits if you:
- Go over the $2000 asset mark
- Have an increase in income
- Receive or refuse an inheritance
Why Can Refusing an Inheritance Cause You To Lose Medicaid Coverage?
Refusing (or “disclaiming”) an inheritance is considered to be refusing a gift that could be used for your care. Medicaid views this refusal as a voluntary transfer of assets. Since the government considers the money a resource you could have used for your care, giving it up triggers a penalty period that disqualifies you from receiving long-term care benefits.
Legacy Navigation: Professional Medicaid Planning Services for Long-Term Care
Planning for Medicaid and long-term care can be confusing and complicated.
Let Legacy Navigation remove some of the stress and anxiety by having our Certified Medicaid Planners™ alongside you as you navigate eligibility and the application process.
We’ll help organize your finances and protect your assets. We’ll complete the Medicaid application process on your behalf, removing the burden of long-term care planning from you and your loved ones, and providing guidance on how to maintain your eligibility long-term.
Contact us today to get started.
The content in this blog is not intended to be a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or other qualified health provider with any questions you may have regarding a medical condition.
