Medicaid

Question 1

Program Structure

Answer 1

• states pay for services on a fee-for-service basis or through managed care programs.
• under fee-for-service arrangements, states pay heath care providers directly for services
• under managed care programs, participants are enrolled in private health plans and the state pays the plan a fixed monthly premium for each participant
• most states use managed care

Question 2

Mandatory Benefits

Answer 2

• inpatient and outpatient hospital services
• physician services
• nursing facility services
• home health services
• early and periodic screening, diagnostic, and treatment services
• laboratory and x-ray services

Question 3

Optional Benefits

Answer 3

• prescription drugs
• dental services
• hospice
• preventative and rehabilitative services
• physical therapy
• chiropractic services
• personal care

Question 4

Home Care vs Home Health Services

Answer 4

• home health services consist of medial care provided in the home by trained professionals such as doctors or nurses (mandatory)
• home care is personal care provided by family members or caregivers (optional)

Question 5

Medicaid Requirements

Answer 5

• the individual must be a US citizen or a resident alien permanently residing in this country
• the individual must be 65, disabled, or blind
• applicant must meet the financial eligibility criteria which consist of both income and asset tests that vary by state.

Question 6

Assets

Answer 6

-there is a limit of $2,000 on countable assets for an individual and $3,000 for a married couple when both are receiving care.

Question 7

Exempt Assets

Answer 7

• Home
• Car
• Personal Property
• Term life insurance and whole life insurance with little or no cash value
• retirement accounts that cannot be withdrawn in a lump-sum (a spouses IRA or qualified plan will not be counted)
• Real or personal property used in a business or for the production of income

Question 8

Community Spouse Resource Allowance

Answer 8

• When ones spouse enters a nursing home, the law wants to make it possible for the other spouse to continue living in the community
• The community spouse is entitled to retain one-half of the couples countable assets up to a maximum of $120,900

Question 9

Income

Answer 9

• for applicants who live in the community the limit is 133% of the federal poverty level ($1,366.67 monthly)
• For nursing home residents income of up to 300% of the federal poverty level ($2,199 per month)
• in states where no spend down is permitted income cannot exceed $2,205 per month.

Question 10

Asset Transfer Penalty Period

Answer 10

• if assets are transferred below their FMV a penalty period will be assessed.
• the penalty period is found by dividing the value of the property transferred by the average monthly cost of nursing home in the state.
• the period begins after the applicant has moved into the nursing home and spent down to the asset limit for medicare eligibility
• there is a 60 month look-back period.

Question 11

Eligible Transfers not subject to penalty

Answer 11

• transfer to spouse
• transfer to child who is blind or disabled
• transfer in trust for the benefit of a person under age 65 or disabled
• transfer of home to a child who is under the age of 21 or a child who has lived in the home for at least 2 years before the applicant moved into a nursing home and provided care that enabled the applicant to stay in the home during that time
• transfer of a home to a sibling who has an equity interest in it and who lived in it at least a year before the applicant moved to a nursing home.

Question 12

Estate Recovery Rules and Implications

Answer 12

• states generally pursue two approaches to cost recovery: (1) from the deceased individuals estate and (2) from liens on the individuals property.
• property is limited to what is included in the probate estate in most states.
• states cannot recover costs paid for the deceased spouse while the surviving spouse is still living.
• liens may be placed on the individuals home, even though it is exempt property for purposes of eligibility
• a state can waive recovery if it would cause undue hardship to the deceased heirs
• assets that are exempt during the individuals lifetime, such as a home or a car are subject to recovery.

Question 13

Medicaid Qualified Annuities

Answer 13

• must be irrevocable and non-assignable
• must be actuarially sound so the payments over the spouses life expectancy will at least equal what was paid for the annuity
• payments must be in equal amounts with no deferral or balloon payments
• the state must be named the remainder beneficiary up to the amount of medicaid payments made for the resident spouse.

Question 14

Permitted Expenditures for a spend down strategy

Answer 14

• paying off debts, including credit cards, mortgages, auto loans, taxes, and other legitimate debts
• purchase of a new exempt asset such as a car or home
• payments for home improvements and repairs to a home or car
• pre-payment for funeral and burial expenses
• payments for services under caregiver agreements, even when a child or sibling is the caregiver
• purchase of certain annuities.