As their care needs increase and financial resources decrease, many aging seniors will have to rely on Medicaid long-term care. This includes services and supports that can help seniors remain living in the community, even if they require a Nursing Facility Level of Care. When the time comes, Medicaid will also cover nursing home costs for qualified individuals, including room and board expenses. And if a nursing home resident is capable of safely returning to the community, Medicaid long-term care can support that transition, too.
To make sure your elderly patients are getting the most out of the benefits that may be available to them, here are five crucial pieces of information about Medicaid long-term care.
Nursing Home Medicaid, Home and Community Based Services (HCBS) Waivers and Aged, Blind and Disabled (ABD) Medicaid are the three Medicaid long-term care programs relevant to the elderly. As the name implies, Nursing Home Medicaid pays for nursing home expenses for people who require a Nursing Facility Level of Care (NFLOC) and meet the financial eligibility limits, which are discussed below. However, beneficiaries are required to give almost all of their income to the state to help cover the costs of care. Nursing Home Medicaid is an entitlement, so all eligible applicants are guaranteed coverage, even if they are not guaranteed a spot in any nursing home they choose.
HCBS Waivers cover long-term care services and supports for individuals who need a NFLOC but want to live in the community as opposed to a nursing home. Benefits can include in-home nursing services, durable medical equipment, medication management, personal care assistance with the Activities of Daily Living (mobility, bathing, dressing, eating, toileting) and more. All states that offer HCBS Waivers have at least one that will cover benefits in the program participant’s home or the home of a family member, and some Waivers will also cover benefits provided in assisted living, adult group homes, memory care units for patients with Alzheimer’s disease and other dementias, and other settings in the community. Unlike Nursing Home Medicaid, HCBS Waivers are not an entitlement. Instead, they have a limited number of enrollment spots. Once those are full, additional applicants are placed on a waitlist. Prioritization on those waitlists vary by Waiver.
ABD Medicaid may also be referred to as state Medicaid or regular Medicaid, but it should not be confused with the regular Medicaid that is available to people of all ages. There is no medical requirement to qualify for ABD Medicaid’s basic healthcare coverage, but individuals who want to receive long-term care benefits via ABD Medicaid must display a medical need for those benefits. Essentially, they qualify for these long-term care services and supports one at a time. But it should be noted that not all states offer long-term care benefits through their ABD Medicaid programs.
To qualify for Medicaid long-term care, applicants need to meet two financial requirements – an asset limit and an income limit. In most states in 2024, the individual asset limit for all three programs is $2,000. The individual income limit for Nursing Home Medicaid and HCBS Waivers is $2,829/month in most states in 2024, and it ranges from $943/month to $1,751/month for ABD Medicaid. All of these limits can change depending on the applicant’s state of residence, marital status, whether or not their spouse is also applying and the couple’s financial and living situations. After they’ve been accepted into a program, state Medicaid offices will check to make sure beneficiaries continue to meet these financial requirements during their annual Medicaid Renewal.
However, even if an individual does not meet these limits there are ways they can reduce their finances to gain eligibility without violating any Medicaid rules. Before getting to those, it’s important to understand that applicants can’t just give away their money or other assets in order to gain eligibility. To make sure they don’t, Medicaid uses the Look-Back Period.
In most states in 2024, the Look-Back Period is 60 months (five years). This means the state will look back into the applicant’s financial history for the 60 months prior to their application date to make sure they have not given away any assets or sold them at less than fair market value. If they have, their application will be denied and they will face a penalty period of ineligibility that could last for months or even years. The Look-Back Period only applies to Nursing Home Medicaid and HCBS Waivers, it does not apply to ABD Medicaid. Click here to learn more about the Look-Back Period and its exceptions in New York and California.
Medicaid applicants and beneficiaries with too much monthly income can spend the excess on medical bills to gain and maintain eligibility, a process known as the Medically Needy Pathway, which is available in 33 states as of 2024. In the other states, people with income over their limit can still qualify for Medicaid long-term care by depositing the excess income into a Qualified Income Trust. These trusts can only be used by Nursing Home Medicaid and HCBS Waivers applicants/beneficiaries. They do not apply to ABD Medicaid.
There are even more options for reducing assets to qualify for Medicaid long-term care. “Spend down” is a common strategy where applicants spend their excess income on themselves or their spouse until they meet their asset limit. They can spend on home modifications, vehicle repairs, paying off debt or even things like going on vacation, as long as they only spend on themselves. Spending on others (like paying for a grandchild’s education, for example) would be a violation of the Look-Back Period. Other methods for reducing assets involve financial tools like Medicaid Compliant Annuities, Medicaid Asset Protection Trusts and Irrevocable Funeral Trusts. There’s also a strategy, known as Half a Loaf, where the applicant knowingly violates the Look-Back Period to protect some assets while using others to pay for care during their penalty period. These asset reduction options are complicated and it’s recommended that individuals consult with a Certified Medicaid Planner before attempting them on their own.
Medicaid may be best known for its nursing home coverage, but the program would prefer to prevent or delay nursing home placement and cover long-term care in the community because it tends to be more cost effective. As mentioned above, HCBS Waivers cover a range of long-term care services and supports in a variety of settings with the intention of delaying nursing home placement. ABD Medicaid also covers these types of benefits, just to a lesser extent. While they can vary by state and program, some typical long-term care benefits covered by Medicaid that can help the elderly remain living in the community include:
• Adult day health care
• Assistive technology and devices
• Case management
• Durable medical equipment
• Financial management
• Home modifications for safety and accessibility
• Homemaker services
• In-home nursing and physician visits
• Meal delivery
• Personal care assistance with the Activities of Daily Living
• Personal Emergency Response Systems (PERS)
• Respite care for unpaid caregivers
• Transportation
• Vehicle modifications
Nearly every state has a program that will cover these benefits in the Medicaid recipient’s home or the home of a family member. In some states, Medicaid will also cover these benefits in an assisted living facilities, adult group homes, memory care units and other locations in the community. However, it’s important to note that Medicaid will not cover room and board expenses in these other settings.
Medicaid will also support seniors who are in nursing homes but want to return to living in the community. Some HCBS Waivers are designed to contribute to this support, but there’s also an entire program dedicated to it – Money Follows the Person (MFP). This program is available in 36 states and the District of Columbia as of 2024 and it will help beneficiaries transition out of an institutional setting and back into their own home, the home of a family member or friend or a group home with more than four unrelated people in the home. The institutional setting is usually a nursing home, but it can also be an assisted living facility, memory care unit or any other Medicaid-funded institution with full-time supervision and care.
MFP benefits can vary by state, but they can include transitional services, paying for movers, covering security deposits and buying necessary furniture, as well as long-term care services and supports like assistive technology, in-home nursing visits and personal care, so they have the same level of care they had in the institution.
Another way Medicaid long-term care delays nursing home placement is by paying family caregivers. Most seniors who continue to live at home receive some type of care from loved ones, but they are rarely paid, so the hours they can dedicate to providing care might be limited. Those hours could increase if the caregiver is paid, which would help prevent or delay nursing home placement. This can be done through some HCBS Waivers and ABD Medicaid programs that offer “Consumer Directed Care,” which can also be called Self-Directed Care, Participant Direction, Self-Administered Services and other similar names.
Whatever it’s called, the Consumer Directed Care option gives Medicaid long-term care beneficiaries some decision-making power when it comes to their care. This can include the ability to hire, and pay, caregivers of their choice, including family members. Some states even allow beneficiaries to hire their spouses as caregivers.
Most programs that offer Consumer Directed Care will also offer Financial Management Services (FMS) as part of the package. This can help the beneficiaries who hire their own caregiver (family members included) with things like calculating taxes, tracking hours and issuing payroll checks.
The Program of All-Inclusive Care for the Elderly (PACE) coordinates care for people over age 55 who require a NFLOC. PACE is designed to delay nursing home placement, and roughly 95% of program participants live in the community according to the National PACE Association, but PACE care plans can include nursing home care if necessary.
An interdisciplinary team of healthcare professionals will create a care plan for all PACE beneficiaries. This plan coordinates all Medicaid long-term care and Medicare benefits for those who are dual-eligible, although being enrolled in either is not a PACE requirement. PACE plans also include all primary care and medically necessary specialty needs, as well as hearing, vision, dental and foot care. Plus, PACE adult day health centers provide daily supervision, medical oversight, exercise programs, meals and transportation to and from the facility.
In some states, PACE is known as LIFE – Living Independence For the Elderly. Thirty-two (32) states and the District of Columbia offer PACE/LIFE programs as of May 2024, and Illinois is scheduled to start offering PACE benefits in June 2024.
To learn more about available PACE programs in your area, paying family caregivers, qualifying when over the financial limits or anything else to do with Medicaid long-term care, connect with our team of professionals at Eldercare Resource Planning. Or you can refer one of your elderly patients to us directly.
