How do I qualify for Medicaid?

Transcript of Interview: ” How do I qualify for Medicaid?”

Mike Barnes:

You know, there are so many questions about Medicaid. People are so confused about it.

Kim Barnes:

Absolutely. So today, we’re bringing in some experts. We’ve got Keith Leuty and VeeCee Spear from Barnett and Leuty Law Firm. They deal a lot with people who are trying to decide if they’re eligible for Medicaid and figuring out how to make that happen. Thanks so much for being with us today. Let’s just start with explaining Medicaid. I know that’s a long conversation, but let’s do that.

Keith Leuty:

That’s usually where we start. Our first question is, “What’s the difference between Medicaid and Medicare?” because they sound so much alike. Medicare is like a health insurance program that you become eligible for when you turn 65. You can become eligible before that in some circumstances. Medicaid is the tool that you use for long-term care, especially for our seniors who may be entering some type of nursing facility or 24-hour care. Medicaid is a program that’s funded 60% by the federal government and 40% by the state. If you can qualify, Medicaid will pick up a lot of the cost of what can eventually turn out to be, in many cases, fairly expensive long-term care for people.

Kim Barnes:

And it’s important to note that while Medicaid is partly funded by the government, it also runs a little bit differently by state.

Keith Leuty:

That’s true. Because Medicaid is funded 60% by the federal government and 40% by the state, each state has its own take on Medicaid. Your audience is spread out across the United States, and we’re based in Texas, so we’re very familiar with Texas Medicaid. Whatever state you’re in may have its own variation, so we always encourage people to talk to an attorney in their state who is familiar with the specifics of how Medicaid is run there.

Mike Barnes:

I think a lot of people are scared off of Medicaid because they think, “Oh, you can only make two thousand dollars a month. I make more than that, forget it,” but there are a lot of other things that can get you to qualify, correct?

Keith Leuty:

That’s true. The two thousand dollars a month is thrown around a lot. What I tell people is that qualifying for Medicaid essentially involves three boxes that need to be checked. The first is the medical necessity—you can’t qualify for Medicaid to pay for your nursing care if you’re not actually in a nursing care facility. The second deals with your income per month. Every year, Medicaid decides on what I like to call their magic number for the year. If your income is below their magic number, you can check box number two and walk right through the door. If your income is above this number, we can still help you qualify by doing a few legal things and jumping through a few hoops. Where people get stuck is on that third box, which is your assets. Medicaid will count your assets, and they also count the assets of your spouse if you’re married. Different formulas are used, but generally speaking, people get confused by the two-thousand-dollar number. It’s true, but not accurate—it’s not the whole story.So, your countable assets cannot be more than two thousand dollars. There’s a difference between your assets and your countable assets because not all assets are countable. The house that you live in, for example, is not a countable asset. There are also ways to convert countable assets into non-countable assets under the Medicaid rules.

Kim Barnes:

Yes, and VeeCee if you would share your long experience working within the Medicaid system.

VeeCee Spear:

I worked with Medicaid eligibility for a number of years and then moved up into working with the commissioner in the rules department. The rules dictate how the program runs. It’s an incredibly complicated program, so your specific situation will be different from someone else’s. It is based on the type of assets you have and whether you’re an individual or have a spouse. We have totally different rules for both categories. The complications arise when there is a living spouse in the community and one goes into the skilled nursing facility. We have different asset requirements when one spouse goes in and the other stays home. If both go in, the requirement is no more than three thousand dollars in total assets. However, there are ways to transition countable assets to non-countable assets. For example, if there’s an individual, we do have a cap on the market value of the home, which this year is $688,000. You can still have a home, but you are limited on the equity value. If you’re talking about a spousal case where one goes in and one stays home, there is no cap on that.

Kim Barnes:

I think you hear cases where someone is in a scenario like Mike’s parents—dad’s still living in independent living, mom’s living in memory care. They could potentially spend so much money on private pay for that memory care that the person in independent living doesn’t have any money left when they might need additional care in the future. Is that one of the scenarios you see often?

VeeCee Spear:

Yes, frequently. If they’re going to go into private pay first, which is often the case because they might not need 24-hour care initially, they can sell the home, put the money into a Medicaid trust, and the trustee can use the money to pay for their care in a private pay facility, assisted living, independent living, or even an apartment. After five years, whatever is put into that trust is no longer visible to Medicaid.

Mike Barnes:

Let’s dig a little deeper into the five-year look-back period because people hear about it and get confused. They might think, “I don’t have five years to wait for Mom to need more care, so what do we do?”

Keith Leuty:

In a perfect world, everyone would be five years ahead in their planning, but it usually doesn’t work that way. Our typical client has had a recent event—maybe a fall or a stroke—and they find out that Medicare is only going to pay for care for about a hundred days. They realize they need to plan for long-term care. If you move the assets into a Medicaid trust and don’t need to apply for Medicaid for five years and one day, all the funds in that trust become invisible or not countable by Medicaid. However, it’s more common that people don’t have five years. They might need to get their loved one into a Medicaid facility in the next two months. Even though it’s been less than five years, we can still use the Medicaid trust as a valuable tool. About 60-65% of the funds put into the trust are converted immediately. The rest is converted at five years and one day.

Kim Barnes:

You mentioned that to qualify, you need 24/7 care. Can that include an Alzheimer’s diagnosis?

VeeCee Spear:

Some skilled nursing facilities have memory units similar to those in private pay memory care facilities. These units keep memory patients safe and provide prompts for drinking water and going to the restroom. The care is similar, but in skilled nursing, you typically share a room with a roommate.

Kim Barnes:

Who makes the diagnosis of needing 24/7 care?

VeeCee Spear:

It can come from a doctor, but the facility staff usually do the evaluations. The McD nurse, who typically does Medicare evaluations, also handles Medicaid evaluations.

Mike Barnes:

There are many people in our group who don’t need to worry about trusts. They have a parent who needs 24/7 care but can’t afford it, so they’re living with them. It sounds like they have an option with Medicaid. How do they start the process?

VeeCee Spear:

The facilities usually have some knowledge of Medicaid rules, but they might not be as experienced. If there’s a nursing facility nearby, stop by and see if they can do an assessment for your parent. The doctor can send over medical records or an order for the facility to do the assessment.

Kim Barnes:

You also need to find out if the nursing facility has Medicaid beds.

VeeCee Spear:

Most facilities have dually certified beds, meaning you can go in on Medicare and switch to Medicaid without moving beds. Some facilities have spin-down beds, where you start as private pay and then switch to Medicaid after a certain period.

Kim Barnes:

Just another example of all the complicated things you need to know.

Keith Leuty:

Yes, there are many nuances. Some people can navigate the process themselves, but it’s wise to speak to someone who knows how to do it. You might find out months later that you didn’t do things correctly, and you’ve been paying full price out of pocket.

VeeCee Spear:

We’re supposed to give Medicaid advice only if we’re a law firm. I’ll talk to everyone and tell them if they need to hire us or not. Nobody knows the rules like I do, and I’ll help them get the benefits if they qualify.

Mike Barnes:

Keith Leuty, VeeCee Spear, thank you so much. You’ve been a wealth of knowledge and helped so many people with these tips.

Kim Barnes:

I think what this teaches us is to ask questions if you’re not sure. You don’t want to leave your parents without the help they need.

Mike Barnes:

If you have any other topics you’d like us to discuss, please let us know. Parenting Aging Parents.

*This transcript is auto-generated. Please excuse any typos or mistakes.