Qualifying for Community Medicaid

By Ronald A. Fatoullah, Esq. and Eva Schwechter, Esq.

{4:00 minutes to read} As the population continues to age, and the life expectancy rate continues to increase, long-term care becomes a reality for many families. One option for long-term care that is appealing to many families who want to keep their loved ones in the comfort of their homes for as long as possible, is the Community Medicaid program. Currently, Medicaid is the only governmental insurance program that covers the cost of long-term care. Medicaid is a "means tested" program enacted by Congress in 1965 to address the health care needs of individuals who are unable to afford such care. Under the Community Medicaid program, Medicaid works with home care agencies to provide aides to qualified applicants.

In order to qualify for Community Medicaid coverage, an individual must be under twenty-one (21) years of age or over sixty-five (65) years of age, disabled, blind, eligible for public assistance, or a recipient of Supplemental Security Income. Additionally, an individual is only eligible for benefits if the assets he owns are minimal. For 2018, in order to be eligible for Medicaid, an individual applicant cannot own more than $15,150 in non-exempt assets. Exempt assets, or assets which are not countable for Medicaid purposes, include qualified retirement accounts, to the extent such accounts are in payout status, and the individual's home, to the extent that the Medicaid applicant, a spouse, a minor, or a disabled or blind child is living in the home. There are other exempt assets and circumstances in which a house may be exempt, which are beyond the scope of this article.

When an individual applies for Community Medicaid, there are income requirements to take into consideration, in addition to the asset requirements. Income, for these purposes, includes but is not limited to Social Security benefits, pension payments, rental income and IRA distributions. For 2018, an individual can keep $862 of his income outright. Under New York Medicaid rules, the overage, or "surplus income," can be utilized as well, by the means of a Pooled Income Trust. A Medicaid applicant can set up a Pooled Income Trust through a recognized non-profit agency to pay his bills that exceed the allowable $862. The income level for a two-person household, where both individuals are receiving Medicaid benefits, is $1,233. The same rules for a Pooled Trust also apply. This process is best overseen by a knowledgeable elder care attorney.

There are also specific income rules set in place for the well spouse of a Medicaid applicant, referred to as the "Minimum Monthly Maintenance Needs (Income) Allowance", or MMNA. Medicaid understands that spouses share the burden of the household, and do not want to penalize the well spouse by not allowing him or her sufficient income to maintain the home when the other spouse has taken ill. Therefore, if the well spouse of the Medicaid applicant has an income of less than $3,090, then the Medicaid rules allow for the Medicaid applicant to contribute a part of his income to his spouse, bringing her up to the $3,090 MMNA level. This spousal budgeting cannot be utilized in conjunction with the Pooled Trust. It is best to discuss with a knowledgeable elder care attorney whether a Pooled Trust or spousal budgeting is right for you.

Anyone who is contemplating Community Medicaid and wants to inquire about their eligibility and income requirements should seek the advice of an elder law attorney.

Ronald A. Fatoullah, Esq. is the principal of Ronald Fatoullah & Associates, a law firm that concentrates in elder law, estate planning, Medicaid planning, guardianships, estate administration, trusts, wills, and real estate. Eva Schwechter is an elder law attorney with the firm. The law firm can be reached at 718-261-1700, 516-466-4422, or toll-free at 1-877-ELDER-LAW or 1-877-ESTATES. Mr. Fatoullah is also a partner with Advice Period, a wealth management firm, and he can be reached at 424-256-7273.