ERA Law Group

A New Era of Attorneys

spend-down

Jun 04

How to Qualify for Long-Term Care Medicaid

By Jessica L. Estes

Long-term care Medicaid is a needs-based program that helps qualified individuals pay for long-term care costs.  Long-term care is required when an individual, for a period exceeding thirty days, is unable to perform the basic activities of daily living such as bathing, dressing, eating, toileting, walking, and transferring.  Long term care can include homecare, adult daycare, respite care and assisted living or nursing home services, but long-term care Medicaid will only cover nursing home services.  As such, an individual must be admitted to a nursing home or other long-term care facility in order to apply for long-term care Medicaid.   

Moreover, there are three eligibility criteria that an individual must meet to qualify for long-term care Medicaid: (1) technical; (2) medical; and (3) financial.  In Maryland, to be technically eligible, an individual must be (1) a resident of Maryland; (2) aged 65 or older, blind, or disabled; and (3) a United States citizen or resident alien.  For purposes of Medicaid, an individual is considered a Maryland resident from the moment they are admitted to a nursing home in Maryland, even if their primary residence is located in another state or the District of Columbia.

To be medically eligible, an individual for a period exceeding thirty days, must require skilled nursing care, assistance with at least three activities of daily living, or assistance with at least two activities of daily living if the applicant also needs assistance with an instrumental activity of daily living.  Skilled nursing care is care or treatment that can only be done by doctors or nurses such as complex wound dressings, rehabilitation, or tube feeding.  Instrumental activities of daily living are not necessary for fundamental functioning but are necessary for an individual to live independently in the community.  Instrumental activities of daily living include such things as using a telephone, shopping, preparing meals, housekeeping, or money management.

Most individuals in a nursing home will meet the technical and medical eligibility criteria; however, the financial eligibility requirements are two-fold and most people will not immediately be eligible.  There are two tests an individual must pass to be financially eligible for Medicaid: the income test and the asset test.  The income test is simple.  If a person’s gross monthly income is less than the monthly cost of care at the facility, that person will pass the income test, and because the monthly cost of care at a nursing home is so high, most do.

The asset test, although simple, is not quite so easy to pass.  An individual cannot have more than $2,500 in countable assets as of the first of the month in which he or she applies for benefits.  As such, most people will need to “spend-down” their assets below that $2,500 limit to be eligible for benefits.  But, be careful!  The Medicaid qualification process is very complex and trying to navigate these rules alone, or with the assistance of a non-attorney, likely will result in wasted time, stress and frustration, and an unnecessarily large nursing home bill.  Instead, seek the advice of a competent elder law attorney who will not only obtain Medicaid benefits for his or her client, but preserve some, or all, of the client’s assets as well.

Apr 09

Personal Care Contracts

By: Jessica L. Estes

If you currently provide care for a chronically ill, disabled, or aged family member, likely you spend, on average, twenty hours per week providing that care.  This is in addition to your own personal commitments, which may, and often do, include managing a full-time job and your own family.  Not only can this be overwhelming, but it can be extremely stressful.  Moreover, family caregivers usually are not paid, as they feel some responsibility to provide this care solely out of love and affection.  

But what happens when they can no longer provide adequate care for their loved one?  The loved one may not have the resources to afford in-home, assisted living or nursing home care.  And, unless the loved one has less than $2,500 in countable assets, they will not qualify for Medicaid benefits.  Although one can “spend-down” assets below the $2,500 limit, Medicaid does not allow reimbursement for the care you provided.  If you are reimbursed and your loved one files an application for Medicaid benefits, that reimbursement will be considered a gift subject to penalty and your loved one may not qualify for benefits for a very long time.

However, a family caregiver may be compensated for their services without any impact to their loved one’s Medicaid benefits if they have a personal care contract.  A personal care contract is an agreement between a caregiver (one who provides care) and a care recipient (one who needs care) detailing the services to be provided for a set amount each month.  To avoid a Medicaid penalty, the personal care contract should be written, signed and dated before you begin providing services or receiving payment.  Also, the personal care contract should specify which services will be included and which will be excluded.  Services can include meals, lodging, furnishings, utilities, laundry, housekeeping, personal assistance (bathing, dressing, grocery shopping, transportation to/from medical appointments, etc.), medical care and costs, and materials and supplies necessary to perform the services.

Additionally, the personal care contract should include the amount the caregiver will charge the care recipient for these services.  You cannot, though, be paid more than someone with your equivalent experience and skills who does this professionally in your general area.  For Medicaid purposes, though, the caregiver should keep a log of the services they are performing on a daily basis and a record of the payments received for these services.  In the event the care recipient applies for Medicaid, the caseworker will want to see a record of the services provided and the payments made, which should be in accordance with the contract.  As long as the services and payments are in accordance with the personal care contract, Medicaid will not penalize payments made to the family caregiver.

Finally, because this is a legal contract, I recommend having a qualified elder law attorney draft the contract for you, especially if Medicaid benefits might be needed in the future.