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Low-Income Seniors May Qualify For Medicaid
from: TRLMedicaid is the largest source of funding for medical and health-related services for people with limited income in the United States. Medicaid is the federal health program for eligible individuals and families with low incomes and resources. Medicaid is jointly funded by the states and federal government, managed by the states.
Each state runs its own program. Under certain circumstances, any category of applicant may be denied coverage. As a result, the eligibility rules differ significantly from state to state, although all states must follow the same basic framework.
There are a number of Medicaid eligibility categories and within each category there are requirements other than income that must be met. These other requirements include age, pregnancy, disability, blindness, income, resources, and one's status as a U.S. citizen or a lawfully admitted immigrant.
Special rules exist for those living in a nursing home and disabled children living at home. Most recently, the Deficit Reduction Act of 2005 significantly changed the rules governing the treatment of asset transfers and homes of nursing home residents. The implementation of these changes will proceed state by state over the next few years.
Low income alone does not necessarily qualify an individual for Medicaid. It is estimated that approximately 60 percent of poor Americans are not covered by Medicaid. The income level you have to be below to be eligible for Medicaid varies by state.
The Deficit Reduction Act of 2005 created a five-year "look-back period." That means that any transfers (gifts of any kind) without fair market value made by the Medicaid applicant during the preceding five years are penalizable, dollar for dollar. All transfers made during the five year look-back period are totaled, and the applicant is penalized that amount after having already dropped below the Medicaid asset limit.
This means that after dropping below the asset level ($2,000 limit in most states), the Medicaid applicant then has to repay all transfers during the preceding five years by private-paying for nursing home costs. Since the person has less than $2,000, there is no source of funds to pay the penalty. Seniors who gift or transfer assets can be caught up in the situation of having no money but still not being eligible for Medicaid.
Medicaid planners typically advise seniors and other individuals facing high nursing home costs to adopt strategies that will protect their financial assets in the event of nursing home admission. By adopting the recommended strategies, many seniors hope they will quickly qualify for Medicaid benefits if the need for long-term care arises.
Medicaid does not pay benefits to individuals directly; Medicaid sends benefit payments to health care providers. In some states Medicaid beneficiaries are required to pay a small fee (co-payment) for medical services.
For a couple, the maximum monthly income is approximately $2,200, but again this differs by state. The asset limit and income for a married couple are adjusted annually by each state.
Exemptions to your "assets" value may be:
*The permanent home the well spouse occupies or that the nursing home patient wishes to return to.
*One car.
*The value of the premium in an annuity. The annuity amount paid out to the annuitant usually counts in income qualifications.
If you want Medicare and Medicaid to work together to cover the cost of medical care, you must go to providers (doctors, hospitals, etc.) that accept both Medicare and Medicaid. Many do not, so check before you go.
Generally regulations require residence in a long-term care facility or skilled nursing home for Medicaid eligibility. In some states a case by case investigation may allow some to be eligible when receiving medical care at home.
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