Moving States When on Medicaid Long Term Care

Summary

Many families are interested in moving their elderly loved ones from one state to another, perhaps to be closer or for a better climate. Whatever the reason, moving out of state can be a challenge for the elderly who are covered by Medicaid. They can’t transfer their coverage between states and they can’t have coverage in two states at the same time. The eligibility criteria in their new state might be different than the criteria in their old state. There may not be any Medicaid beds available in their new state, or maybe there isn’t a program that provides the right kind of in-home benefits.

While the process can be complicated, it is possible for a Medicaid recipient to move to a new state without a lapse in benefits and without needing to pay out of pocket for any care by utilizing Medicaid Pending status and Retroactive Medicaid. Just how complicated depends on the type of Medicaid program, the variations in eligibility criteria between the two states and the specific circumstances of each beneficiary’s financial and medical situation.

Overview

The overall concept of moving out of state with Medicaid is straightforward. The Medicaid beneficiary cancels their coverage in their old state and then re-applies when they move to their new state.

In most cases, there is no waiting period to re-apply, so your client could re-apply in their new state as soon as they arrive. However, some states (like Texas and Nevada) require that you reside in a nursing home for at least 30 days before applying for Medicaid’s nursing home coverage. So, a senior moving to one of those states may need to wait to re-apply. But time spent in a nursing home in another state might count toward that 30-day wait, depending on the situation.

Most of the challenges start to arise if there is too much variance between states when it comes to the eligibility criteria or the Medicaid long-term care programs themselves, which we’ll discuss next.

Moving with Different Types of Medicaid

Of the three Medicaid long-term care programs relevant to seniors – Nursing Home Medicaid, Home and Community Based Services (HCBS) Waivers or Aged, Blind and Disabled (ABD) Medicaid – the easiest, and most common, one to move out of state with is Nursing Home Medicaid. That’s because its eligibility criteria and benefits are fairly consistent from state to state. The most prevalent complication is finding an available Medicaid nursing home bed in the recipient’s new area. Contacting nursing homes to see what spaces they have available, and getting on a waitlist if necessary, should be done as soon as possible and well before the Medicaid recipient actually moves.

Moving out of state and maintaining coverage through an HCBS Waiver will likely be much more difficult than moving with Nursing Home Medicaid. Every state has at least one Medicaid Waiver program, but there are usually major differences between the programs in terms of benefits, who provides the benefits, where they can be provided and how often they can be provided. Some HCBS Waivers may allow beneficiaries to select their own caregiver with a Consumer Directed Care program, while others may only offer caregivers from a limited network. Some programs may partner with several agencies that offer multiple caregiving options, while others may use one agency with limited resources.

Further complicating matters is the fact that HCBS Waivers are not an entitlement like Nursing Home Medicaid, which guarantees benefits to all eligible applicants without wait. Most HCBS Waivers, on the other hand, have a limited number of enrollment spots, and once those spots are full additional applicants are placed on a waitlist. Some waitlists are prioritized by time on the list, which could lead to a long wait for someone moving from a new state. But some waitlists are prioritized by need, with emergency or crisis situations weighing most heavily.

ABD Medicaid beneficiaries who move across state lines will encounter similar challenges to those faced by HCBS Waiver beneficiaries. The types of long-term care services and supports available through ABD Medicaid can change depending on the state, as can the care providers, location and frequency. Financial and functional criteria for ABD Medicaid and its long-term care benefits can also vary significantly by state, more so than Nursing Home Medicaid or HCBS Waivers, as you will see in the next section.

State Variations

Financial Limits

Medicaid’s income and asset limits can all vary by state, type of Medicaid and marital status, and they are also updated annually. Industry professionals are likely familiar with the current limits in their state, but may not be familiar with the current limits in other states, and one probably don’t know the limits in all of them. So, to help a Medicaid beneficiary client who is moving to a new state, you would need to do some research or contact someone who is familiar with limits across the country – like one of our Certified Medicaid Planners.

If a Medicaid recipient moves to a state with lower financial limits, and their resources exceed these new limits, the recipient would need to reduce their assets and/or income to meet the new limits and maintain their eligibility. This is especially true for persons moving from California to any other state. It is possible to make these reductions without having a lapse in Medicaid coverage, but it can be difficult. Coordinating the timing of the switch in coverage without violating any rules while maintaining eligibility and maximizing resources takes in-depth knowledge of the Medicaid regulations and processes in both states. It may also require using financial products such as Qualified Income Trusts, Medicaid Compliant Annuities or Irrevocable Funeral Trusts, just to name a few.

If the Medicaid recipient is also a homeowner, moving across state lines can be even more complicated. There are provisions they can use to transfer their home, such as the Child Caregiver Exemption or the Sibling Exemption, that won’t break Medicaid regulations (specifically the Look-Back Period), but those require a specific set of circumstances and qualified family members. If the moving Medicaid recipient sells their home, chances are they will need to spend almost all of those proceeds to get under the asset limit in their new state. They could do this by purchasing a new home, as long as it is under Medicaid’s home equity value limit in the state. They could also accept the ineligibility from being over the asset limit, spend the house sale proceeds on long-term care until they get under the asset limit and then re-apply for Medicaid. This strategy, like so many Medicaid strategies, is best-used with the help of a professional planner.

Functional / Medical Need

There are fewer variations between states when it comes to Medicaid’s functional, or medical, eligibility requirements. The variations that do exist, however, can still cause issues for Medicaid recipients moving out of state.

The functional eligibility criteria for Nursing Home Medicaid in every state is needing a Nursing Facility Level of Care (NFLOC). The exact definition of NFLOC and how it is measured, however, can vary by state. In some states, a NFLOC may be defined as requiring assistance with three of the Activities of Daily Living. Other states may define it as needing assistance with four of them. Many states have their own standardized evaluations that measure level of care need, and these may place more or less emphasis on certain conditions, like cognitive or behavioral issues.

All of these variations mean that needing a NFLOC in one state does not necessarily mean another state will recognize that same need, which could lead to a lapse in Nursing Home Medicaid eligibility and coverage for beneficiaries moving out of state. The same is true for HCBS Waivers beneficiaries moving out of state because the functional eligibility criteria for almost all HCBS Waivers is also a NFLOC.

The functional eligibility requirement to receive any kind of long-term care benefit through ABD Medicaid is showing a functional need for that benefit, as determined by the state Medicaid agency. So, an agency in one state may decide a Medicaid recipient shows a need for a long-term care benefit, but when that recipient moves to another state the agency there may have a different opinion. To be clear, there is no functional requirement to simply receive basic healthcare coverage through ABD Medicaid. Functional requirements only apply if the ABD Medicaid recipient wants long-term care benefits.

Medicaid Pending & Retroactive Medicaid

While there is no waiting period to re-apply for Medicaid once you move to a new state, it can take anywhere from 15-90 days for the state to approve or deny the application. Medicaid Pending and/or Retroactive Medicaid can help bridge any gaps in coverage during this time.

Anyone who applied for Medicaid but has not yet been approved or denied has “Medicaid Pending” status. Some nursing homes and caregivers will provide services to Medicaid Pending clients even though they are risking not being paid if the client’s Medicaid application is denied. If the application is accepted, Medicaid will pay for the previous charges. If it is denied, the individual is not legally required to pay nursing home bills, although they may be required to pay for any in-home care provided.

In states that offer it, Retroactive Medicaid will cover up to 3 months of previous nursing home expenses for eligible Nursing Home Medicaid applicants. To use Retroactive Medicaid, a senior who is moving to a new state would need to pay for the nursing home in their new state out of pocket and then apply for Retroactive coverage when they apply for Medicaid in their new state (often as easy as checking a box on the application). If their application is accepted, Medicaid will reimburse them for the nursing home expenses they paid out of pocket. To be clear, Retroactive Medicaid can only be used with Nursing Home Medicaid, it does not apply to HCBS Waivers or ABD Medicaid.

Estate Recovery Considerations

States are required by law to try and collect reimbursement for Medicaid long-term care through the beneficiary’s estate after their death. If an individual receives Medicaid long-term care in two states, both of them could attempt estate recovery. The states are not allowed to collect more than they paid out for long-term care, so there is no concern that two states attempting recovery might lead to an unfair collection amount, but it could certainly complicate matters. For example, some states will place a lien on a Medicaid beneficiary’s home as soon as they start receiving long-term care benefits to help them eventually collect reimbursement via the home, if necessary. But if that beneficiary moves out of state and needs to sell the home, they will first need the state to remove the lien and come to an agreement concerning their estate recovery.

The rules governing estate recovery vary by state more than any other Medicaid rules, and that’s saying something. This means, once again, that consulting with a professional who understands all of Medicaid’s 50-state nuances is highly recommended if you have a client who is moving out of state.