This week was a big week for potential Medicaid beneficiaries. Two discrete events occurred this week and both have to do with a Medicaid applicant’s income and eligibility for Medicaid benefits.
Medicaid is a government health insurance program for needy individuals. Unlike most policies of health insurance, Medicaid will pay for long term care services, such as care in a nursing home or assisted living residence. In order to qualify for Medicaid long term care services, an individual must have limited assets and must require assistance with several of the activities of daily living, for example, clothing, bathing, toileting, transferring, and mobility.
In addition, in order to qualify for Medicaid long term care services at home or in an assisted living residence, an individual must have income that is below an income cap. The current income cap is $2,163 per month. The $2,163 figure is a gross figure, so deductions from the applicant’s income (taxes, health insurance premiums, etc.) must be added back in to determine whether or not the applicant’s income is at or below the $2,163 cut off figure.
If a person applies for Medicaid long term care services at home (for instance, he wants Medicaid to pay for a home health aide) or in an assisted living residence, and his income exceeds the cap by one penny, he will not qualify for Medicaid long term services at home or in assisted living residence. If this individual needs long term care and cannot afford to pay for the care, he will have to go reside in a nursing home. There is no income cap for Medicaid services in a nursing home.
This week, what I have just written changed in substantial ways. The first change came by way of a federal court decision. Many elderly individuals apply for a cash assistance program available through the United States Veterans Administration commonly known as Aid and Attendance. Aid and Attendance will provide approximately $2,100 per month in cash assistance to a qualified veteran and approximately $1,100 per month in cash assistance to the widow of a qualified veteran.
In order to receive Aid and Attendance, the veteran (or his widow) must have income that is insufficient to pay for his/her care. Unreimbursed medical expenses (such as nursing home or assisted living or a home health aide) can be used to reduce income. So, many veterans (or their widows) will qualify for Aid and Attendance when they require long term care.
The problem has been that Medicaid counts Aid and Attendance, or a portion of the award, as income and often this income disqualifies the person from Medicaid services due to the income cap. A federal court held that counting Aid and Attendance is inappropriate when the reason for the receipt of the benefit is due to unreimbursed medical expenses, which it almost always is.
This is a big victory because it means that a Medicaid applicant’s receipt of Aid and Attendance will not disqualify him from receiving Medicaid benefits when the time arises.
The second major event of the week eclipses and, from a practical standpoint, renders moot the first major event. The State of New Jersey received approval in October 2012 to eliminate the income cap from its home-based Medicaid long term care services program. To date, the State failed to implement that change, but this week, the State announced that it will implement the change.
It gets a bit complicated. A person’s income that exceeds the income cap will need to be placed into a trust commonly known as a Miller Trust, but the exciting thing is that there now is a route for individuals with income that exceeds the income cap to qualify for Medicaid at home and in an assisted living residence.