People who need the assistance of Medicaid—especially the elderly who need nursing home care or other services for their senior years—will face issues of how much income or assets they can have and still qualify for Medicaid. The rules vary depending on whether you’re single, married with one spouse applying, or married with both spouses applying. Though the program sets limits on income and assets that can seem too restrictive, there are legitimate programs to qualify for while shielding what you’ve worked for and accumulated throughout your working life.
If you or a loved one needs Medicaid assistance in or around Reading, Pennsylvania, contact the attorneys at Curran Estate and Elder Law, PLLC. We are knowledgeable and experienced in Medicaid rules and regulations and can help you plan for the day you may need senior care. We’re here to assist you through proper asset and income management strategies.
Curran Estate and Elder Law, PLLC proudly serves clients throughout Pennsylvania, including Berks County and the neighboring counties of Schuylkill, Montgomery, Lancaster, Chester, and Lebanon.
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Medicaid is a jointly operated federal and state program that provides health care and living assistance for low-income people, families and children, pregnant women, the elderly, and people with disabilities. It’s administered by both the federal and the state government where you live. If you are disabled and have a low income and few assets, qualifying can be fairly straightforward. For those who have worked until their elder years and may need the services of a nursing home or other assistance with living at home, qualifying may present a somewhat bigger challenge.
In Pennsylvania, when it comes to elder assistance, the qualifying standards vary on your status—single, married but filing individually, or married and filing jointly. If you are single or married and applying singly, the income level is $2,523 a month from any source, including Social Security and other retirement funds. If you are married and need services for both spouses, the income limit doubles to $5,046.
Any applicant, whether single or married, cannot have more than $2,000 in assets, though one’s home is exempted, as are household goods and furnishings, and one vehicle. A non-applicant spouse can have assets up to $137,400.
The income and asset standards apply at any age when it comes to applying for Medicaid, but they come into sharper focus for those who have worked until retirement and may need the services of a nursing home or other assistance that they cannot otherwise afford.
Medicaid is designed as “the payer of last resort,” so when it comes to qualifying, the plan’s administrators will look back over your previous five years of financial transactions. If they determine that you’re given away assets in order to qualify for Medicaid, they can deny your application until five years have passed since the last transfer.
Though one’s home is generally exempted from the Medicaid asset threshold up to a certain equity limit, when the Medicaid recipient passes away, the government can come after the equity in their home to pay back what the program has provided in benefits.
Therefore, during the five-year look-back period, you cannot gift your home to someone else unless the transfer is made to a spouse, a child under the age of 21, a child of any age who is blind or totally disabled, a sibling who has an equity interest in the home, or a child who resided in the home and provided assistance to you for two years so you could avoid needing nursing-home placement.
In other words, if you know or sense that you’re going to need Medicaid assistance, you need to plan ahead. Reach out to a skilled estate planning attorney for guidance.
You can transfer certain assets within the five years prior to your needing the assistance of Medicaid, but that requires careful planning. To prevent the Medicaid program from using your assets to disqualify you, or later seizing your assets to repay for the services provided, you can place your assets in what is called a Medicaid Asset Protection Trust (MAPT). However, the transfer into the trust must be made five years before applying for Medicaid.
There are also ways to protect income from disqualifying you by creating a Qualified Income Trust, also known as a Miller Trust. Pooled Income Trusts are offered by nonprofit organizations and are similar to Miller Trusts. Money that goes into either of these trusts is not considered income for Medicaid qualification purposes.
The most essential point is that you need to plan for every contingency in your life. If you retire and suddenly need living and health care assistance beyond what Medicare provides, or what you can afford, you may be forced to turn to Medicaid. When you do, you will come face to face with the realities of the asset and income thresholds established by the program.
Elderly individuals who suddenly need Medicaid to pay for nursing home or in-home assistance are not the only ones who may need asset and income protection strategies. If you have a child who is blind or disabled and needs long-term care, you also will need to do some comprehensive asset and income protection planning. If you foresee the eventual need for Medicaid for you or a loved one in Pennsylvania, reach out to Curran Estate & Elder Law, PLLC for a consultation. We can help you move forward.