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Medicaid’s Coverage of Long Term Care

Indiana Elder Law
Medicaid is the Default Long Term Care Insurance for the Middle Class

For better or for worse, Medicaid is the primary method of long term care coverage in the United States. But navigating the Medicaid system is complicated and confusing. Here are the basics.

Medicaid is a joint federal-state program that provides health insurance coverage to low-income children, seniors, and people with disabilities. In addition, it covers long-term care for those who qualify. This coverage has traditionally meant care in a nursing home, although coverage of care in an assisted living facility, adult day care, or at home are possible (see below).

In the absence of any other public program covering long-term care (Medicare provides only limited nursing home coverage), Medicaid has become the default long term care insurance of the middle class. Lacking access to alternatives such as paying privately or being covered by a long-term care insurance policy, most people pay out of their own pockets for long-term care until they become eligible for Medicaid.   However, obtaining Medicaid benefits to assist with long term care does not require an individual to be completely destitute.

Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive federal money, which pays for about half the state’s Medicaid costs. (The state picks up the rest of the tab.) This complicates matters, since the Medicaid eligibility rules are somewhat different from state to state and they keep changing. To be certain of your rights, consult an elder law attorney who can guide you through the complicated rules of the different programs and help you plan ahead.

While the majority of nursing homes accept Medicaid patients, there are some that do not. Even nursing homes that accept Medicaid recipients may only have a limited number of Medicaid beds available. Nursing homes must be certified by the state in order to accept Medicaid payments.

To qualify for coverage, applicants must have limited assets and income. You typically cannot have more than $2,000 in countable assets. To lower your assets, you need to spend them down by paying for things that benefit the Medicaid applicant, investing in exempt assets, or making transfers. In regard to transfers, though, you cannot simply give away your resources in order to qualify for Medicaid. You should consult an elder law attorney before making any transfer as transfers can result in period of ineligibility under Medicaid.  An applicant must also meet an income limit. In Indiana, the income limit for Medicaid recipient who desires assistance with long term care is $2,382 in 2021.  For individuals who have income above this amount, he or she will need to create a Miller Trust and deposit some or all of their monthly income into the Miller Trust to qualify.

In addition to the strict income and asset limits, you must meet level of care requirements in order to qualify for nursing home coverage. Each state sets its own level of care criteria and the criteria is not always clear. The state looks at an applicants’ functional, medical, and cognitive abilities to determine if they need care in a nursing home. You are usually determined to need long-term care if you need help with two or more “activities of daily living” (such as bathing, dressing, eating, moving, and going to the bathroom). But to need a nursing home level of care, you may also need frequent medical care, such as assistance with medication, injections, IVs, or other medical treatment. The state may also consider your cognitive abilities—i.e., whether you have the ability to make decisions on your own.

Once you qualify for Medicaid, the program pays for all your basic expenses, but nursing home residents may be charged extra for certain amenities, like a private room, comfort items, or specially prepared food.

In addition to nursing home care, Indiana Medicaid can cover care in an assisted living facility, adult day care, and home care services. All are provided through home- and community-based services “waiver” programs to individuals who need a high level of care, but who would like to remain outside a nursing home.

Contact the Stinson Law Firm at 317-622-8181 or www.stinsonlawfirm.com to learn how to obtain Medicaid benefits without complete impoverishment.