All too often when I am reviewing the requirements for Medicaid Nursing Home eligibility and an asset protection plan with a client their immediate reaction is the same - they are never going to a nursing home and I need not waste any time discussing it. Fortunately, for many of my clients that may be true. For an equally large percentage, however, it is not.
Is there any way to accurately predict who will one day need to enter a nursing home? Unfortunately, the answer is no. One thing that appears to be certain, however, is that a great majority of seniors would prefer to remain at home and receive care there rather than in a nursing home.
The Medicaid Home Care program provides a viable solution for many Medicaid eligible seniors. With Medicaid home care, there are no penalty periods imposed if a senior transfers (gifts) his or her assets. The assets transferred, however, would be subject to the five year look back period, and would create a period of ineligibility for nursing home Medicaid as provided for by the Deficit Reduction Act of 2005 ("DRA").
Additionally, if the applicant for Medicaid home care is married, the couple can transfer all assets into the name of the non-applicant spouse. The non-applicant spouse can then execute a "spousal refusal," which would allow the applicant spouse to become eligible for the Medicaid home care program.
If a single individual applies for Medicaid home care and has monthly income in excess of the amount permitted by Medicaid, he or she can transfer his or her excess income to an approved "pooled trust." The pooled trust will, in turn, be permitted to reimburse the applicant for many of his or her expenses from the excess income her or she contributed.
If the applicant for Medicaid home care is single and does not have a spouse or blind, disabled or minor child residing with him or her, the applicant will be subject to a $820,000 home equity cap on the net equity value of his or her home for eligibility purposes.
In order to receive home care services, the applicant's health and safety must be able to be maintained in the home. The applicant's conditions must be "stable" (not expected to suddenly deteriorate or improve), and not require skilled professional care. The assistance in the home must be needed "to prevent a health or safety crisis" from developing.
The level of services and number of hours the home care program will provide depends in large part on the needs of the applicant, his or her ability to "self direct" activities of daily living, the amount of assistance available from his or her spouse and/or others residing in the home, and the specific Medicaid home care program for which the applicant is applying.
In light of the harsh requirements imposed by the Deficit Reduction Act, the Medicaid home care program provides, in many instances, an excellent and viable alternative.