MEDICAID (TITLE 19)
AND NURSING HOME COSTS
WHAT IS MEDICAID?
Medicaid is a jointly administered federal and state program which provides access to health care for poor elderly and disabled individuals as well as poor children and their caretaker relatives. In Connecticut, Medicaid is often called "Title 19". The Medicaid program pays for the medical care and treatment of eligible persons. Each state’s Medicaid program is different, although certain federal rules apply to all programs. The description here focuses on Connecticut’s Medicaid program.
The cost of long-term care is extremely high, with the average "self-pay" nursing facility cost in Connecticut currently around $7,905.00 per month. Medicare covers, at best, 100 days of "skilled nursing facility,” or SNF care per benefit period, with daily co-payments imposed after the twentieth day. Therefore, Medicaid must often be considered as a payment source when it appears that a nursing facility placement may be long‑term.
FINANCIAL ELIGIBILITY FOR MEDICAID
Medicaid rules govern income and asset eligibility of those seeking assistance with the high costs of long-term care. The eligibility rules address two different financial concepts; income, which consists of regularly recurring payments, such as Social Security or other pension payments, and assets which are a person's accumulated resources, including money in savings accounts or stocks and bonds, real property and other possessions. With respect to income, if an individual's monthly income is insufficient to cover the monthly "self‑pay" nursing facility charge, income eligibility can generally be established. After eligibility is established, most of the recipient’s income will have to be expended on the cost of the nursing facility care, applied to other medical bills or diverted to the spouse at home, if there is one (see below). The portion that goes to the nursing facility is called “applied income.”
The rules governing assets require that a single individual may not have more than $1,600.00 in liquid assets. It is important to understand that even if a Medicaid applicant owes substantial money to a hospital or nursing facility, the bill may not be off‑set against any assets in excess of the $1,600.00 asset limit. In Connecticut, Medicaid eligibility will not be granted until such time as the applicant's actual assets are reduced to no more than $1,600.00.
Some assets are not counted, most notably the home of an applicant or recipient who resides in the community. In addition, if a homeowner is permanently placed in a nursing facility and becomes a Medicaid recipient, the home continues to be excluded from consideration as an asset as long as certain categories of close relatives specified by the law, continue to reside in the home. These relatives are spouses, minor children, adult disabled children and siblings with an ownership interest in the home, who resided in it for at least a year prior to the institutional placement of the homeowner.
In addition, an amount up to $5,400.00 is not counted if placed in an irrevocable burial fund with a Connecticut funeral home; or a refundable contract for up to $1,200, ($1,500 for some cases with married persons).
PREVENTING THE IMPOVERISHMENT OF SPOUSES
The financial eligibility rules differ in some important and favorable ways for married couples. When a spouse, who is usually called “institutionalized spouse”, requires Medicaid to pay for nursing facility care, the law provides substantial financial protection for the other spouse, who remains at home, and is often referred to as “community spouse". These special rules, called "spousal impoverishment prevention" provisions, were intended by Congress to prevent the impoverishment of spouses of frail or ill individuals who require institutional long term care. Most notably, a couple’s assets generally DO NOT need to be spent down to the $1,600.00 level applicable to single applicants. Rather, the community spouse is entitled to keep at least half, and, under certain circumstances up to the full amount of the couple's assets as of the date the institutionalized spouse entered the nursing facility.
As of the date of the nursing facility admission, at the request of either spouse, the State Department of Social Services must complete an assessment of the couple's assets. After reviewing, they must notify both spouses as to how much of the assets each spouse may retain without causing the institutionalized spouse to be ineligible for Medicaid. The law requires both nursing facilities and the State Department of Social Services to inform spouses in writing about their right to a timely assessment. However, since notification is not uniformly provided, it is very important for spouses to understand these protections so that they can assure that their assets are treated appropriately.
While the institutionalized spouse, like any other Medicaid applicant, may only retain $1,600.00 in liquid assets, the community spouse must be permitted to retain at least half of all spousal assets. This is called the “community spouse protected amount” or “CSPA”. If the couple's assets are less than $19,908.00, the community spouse must be permitted to keep all of the assets. The most a community spouse will be permitted to keep is $99,540.00.
(These figures are applicable for calendar year 2006).
The "spousal impoverishment prevention" rules provide that community spouses should be permitted to retain a specified level of monthly income, or “minimum monthly needs allowance” (“MMNA”). Currently, the basic income level is $1,603.75. The community spouse is allowed to have an even greater income level if her shelter costs, including rent or mortgage, real property taxes, and home owner's insurance are high. A special formula is used to determine if a "shelter hardship" allowance is in order. In addition, a community spouse with "exceptional circumstances resulting in financial duress," may be able to obtain a higher income level. (The maximum “MMNA” allowed for 2006 is $2488.50.)
If a community spouse's income is not as high as the amount permitted by the law, the community spouse may be able to retain more than half of the couple's assets, or the income of the community spouse. However, a very informal appeal process, called a "Fair Hearing" must be used in order to shelter more than half of the couple's income. A Fair Hearing is also necessary to increase the community spouse's income to encompass financial need caused by "exceptional circumstances". Requests for Fair Hearings must be made promptly and in writing, addressed to the state Department
of Social Services upon receipt of the Department's written notification of it's determination of spousal assets. The notice of spousal assessment, given by D.S.S. contains the address to which requests for Fair Hearings are to be sent.
TRANSFERS OF ASSETS
There are severe penalties imposed upon those who give away their assets in order to become eligible for Medicaid. If any assets have been given away, or if gifts are being contemplated, it is essential that a knowledgeable elder law attorney be consulted.
THE MEDICAID APPLICATION PROCESS
Applications for Medicaid may be obtained from most nursing facilities or from the Department of Social Services. Department offices are listed in the Blue Pages of the telephone book. Most facilities have social services staff willing to assist with applications. The application form is very long and many forms of documentary proof must be submitted. All applicants will be asked to produce banking records going back 36 months from the month of application. Obtaining these records can take time; this documentation should be requested as early in the application process as possible.
Applications must be fully processed, a decision rendered and written notification sent to the applicant within 60 days of the application filing date. In cases of individuals under the age of 65, who must also prove that they are disabled, the Department has 90 days to render its decision.
If an applicant was fully eligible for Medicaid during the 3 months prior to application, Medicaid may be retroactively granted for that period of time. This provision can provide significant relief from financial hardship in cases of sudden and unexpected catastrophic illness.
RESOURCES FOR HELP
It is often helpful to consult with a knowledgeable elder law attorney, especially if a community spouse needs assistance in protecting spousal assets to prevent impoverishment. While it is not required to have an attorney present at a Fair Hearing, representation is often beneficial. The Area Agencies on Aging fund legal services providers to assist seniors of modest means with these matters. Seniors with more substantial assets may wish to consult with a private elder law attorney. The Connecticut Bar Association can provide the names of local attorneys who are members of the Bar Association's Elder Law Section.
The Legal Assistance Resource Center, (LARC) publishes several booklets that contain valuable information for individuals and families contemplating nursing home admission. These include "Paying for Nursing Home Care with Medicaid", "Your Home and Title 19 (Medicaid)" and "Are You Considering Nursing Home Care?" These booklets are available from LARC, at www.larcc.org, and from any legal services office.
Copyright © Center for Medicare Advocacy, Inc. 09/04/2013