Question: What are the major financial requirements for being approved for Medicaid long term care benefits?
Answer: Generally, there are asset requirements such as some states called “SSI” states say that the Medicaid applicant can keep up to $2,000 and exempt property such as the home and a car, wedding rings, funeral trusts, burial plots, and a small burial expense fund to cover incidentals such as Thank you cards, postage and things of that nature. Other states called “209(b) states” only let the Medicaid applicant keep up to $1,500 plus exempt property. There are also limits for what the spouse not in a nursing home can have. Sometimes it becomes necessary to convert non-exempt property into exempt property. Such an example would be taking cash and buying things for fair market value such as fixing up a house (new roof, new carpet, new cabinets for the home that is usually exempt You might spend cash to fix up the Medicaid applicant’s car, even though, they may never drive it again.
There are also income rules that vary from state to state. Some states don’t care how much you make because all of the Medicaid Applicant’s cash (Social Security, VA Pension, other pensions and income from stock, bonds, royalties) goes to the nursing home. In those states, the Medicaid rules have the state pay the difference between the actual cost of the nursing home less what already has been paid by the Medicaid Applicant. Of course, if your income is so great you may not need Medicaid at all. There are other states that are called “income gap states”. Those states say that if you are receiving more income than the state allows that you have to set up a Miller Trust otherwise known as a Qualified Income Trust the money that goes through a Miller Trust is considered “unavailable” to the Medicaid Applicant and it will then say that that income going through the trust is “unavailable” to the Medicaid Applicant. The now “unavailable” income goes to the nursing home (some may be diverted to the spouse, if the spouse does receive enough income on their own) and Medicaid again pays the difference between the actual cost of the nursing home less what the Medicaid Applicant has already paid each month. The more money each month that the Medicaid Applicant receives, then the less that Medicaid has to pay. And conversely, the less money that the Medicaid Applicant pays, then the more that Medicaid pays each month to the nursing home.
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