Medicaid is a joint state/federal program that provides health care for those in need. Medicaid often comes into play for senior citizens when it comes to paying for nursing home expenses when long term care is needed. There are three tests to pass in order to qualify for these benefits.
Categories of Eligibility Test
To be eligible for Medicaid benefits, the applicant must fit into one or more of Medicaid’s categories of eligibility:
- Individuals aged 65 or older needing care at the level being sought;
- Individuals who are legally blind; or
- Individuals who are physically or mentally challenged.
This particular Medicaid eligibility test is not normally the cause of a denial of Medicaid benefits, it is the following two tests that may require Medicaid planning, or in other words, studying very early on in the process to address these tests.
Income Test
In order to receive the need-based Medicaid benefits, applicants must be below certain income levels. Some states use the income of the applicant to deny eligibility if it is over a certain number, called the income cap, and other states merely use the applicant’s income to determine the amount of benefits. In New York, if an applicant has otherwise met Medicaid eligibility requirements, they have to contribute any income over the income limitation towards the cost of the care on a monthly basis.
Resource Test
Medicaid planning is particularly helpful when it comes to passing the resource test to determine eligibility. Resource limits are low for eligibility, but there is property that is exempt, including a residence if a spouse is still residing in the home. Should an applicant ‘fail’ the resource test, they may still qualify for Medicaid benefits, as they can ‘spend down’ their assets to meet the eligibility resource requirement.
Planning for long term care is an issue important for every family. Medicaid planning, along with proper estate planning, can help a family face these important issues. Estate planning attorneys and Medicaid planning attorneys are experienced in this complex area of law, and are your best resource for planning for your family’s particular needs.
Michael Robinson, Estate Planning Attorney
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