Medicaid provides long term care coverage to eligible individuals who meet certain asset and income requirements. Many people do not realize that they can become eligible for Medicaid and preserve assets – even when their assets and income seem too high. There are two types of Medicaid long-term care: Nursing Home Care (“Chronic Medicaid”) and Home Care (“Community Medicaid”). Under either program, you can still qualify for long term care regardless of income. This does mean you can keep your income, but high income will not disqualify you from receiving Medicaid. Moreover, there are ways to retain all your income if receiving Community Medicaid. If married, there are ways to keep a portion of your income when receiving Chronic Medicaid
When examining Medicaid eligibility, it is important to distinguish between income and assets. An individual applying for Community or Chronic Medicaid in New York can have only $16,800 in assets, as well as a pre-paid irrevocable burial fund and certain exempt assets (e.g., an IRA, car, etc.). If married, the community spouse can keep up to $137,400 of the couple’s assets. If the community spouse is over the asset level, they can sign a spousal refusal. Spousal refusal is a declaration that the community spouse will not contribute to cost of care because they need the assets.
As to income, a Chronic Medicaid recipient must turn over all income above $50 per month to the nursing home. Medicaid pays the rest of the cost of care. There is no way around paying income to the nursing home, unless the applicant is married. If married, the community spouse can retain $3,435.00 in income in 2022. A portion of the Medicaid applicant’s income may be transferred to the community spouse to reach that $3,435.00 limit. If the community spouse’s total monthly income exceeds $3,435.00, it must go toward the nursing home bill – unless using spousal refusal.
Income guidelines are different for Community Medicaid. This is because to “Age in Place” seniors need to use their income to live in the community. In 2022 Community Medicaid recipients can keep $934 per month of their income. Excess income is technically available to Medicaid. But those in the know use a Pooled Income Trust to capture the excess income. All excess income is deposited in the trust, run by a nonprofit, which pays the Medicaid recipient’s bills using that excess amount.
Eligibility for Medicaid is complex due to the strict income and asset guidelines. Anyone with assets exceeding $16,800 or income over $934 should consult an experienced elder law attorney.