Medicaid

What is Medicaid? Who is eligible for Medicaid? How do I apply for Medicaid? What does Medicaid cover? Does Medicaid pay for long-term care? Does Medicaid pay for prescription drugs? If a child is taking care of a parent in the child's home, can the child charge room and board? How do the rules differ for single and married persons with respect to the Medicaid program? What is the "three-year look-back" rule? Can a parent sell his or her house to his or her child for $1.00?

What is Medicaid?

Medicaid is a program that provides medical assistance to certain individuals or families with low income and/or limited available resources, regardless of age. The Medicaid program became law in 1965 as a joint venture between the federal and state governments. This program assists states by providing adequate medical care to eligible persons.

Although coverage varies by state, there are broad national guidelines provided by the federal government maintaining that each individual state:

• Establish its own eligibility standards
• Determine the type, amount, duration and scope of services
• Set the rate of payment for services
• Administer its own program

Because each state's Medicaid program varies, you should check with your local Medicaid office to find out about rules and regulations specific to your state. You can also call your local agency on aging for information about Medicaid policies in your region.

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Who is eligible for Medicaid?

Medicaid is for certain individuals or families with low income and/or limited available resources, regardless of age. Therefore, in order to qualify the applicant must prove that he/she falls within certain income and asset levels. Though these amounts may vary from state to state, the information below will give you an idea of the governing rules:

• The applicant must have a monthly income that does not exceed approximately $300 to $600 (this amount varies by state).
• The applicant's total assets (less a primary residence, one car and personal possessions) cannot exceed a total dollar amount of approximately $2,000.
• The applicant must be a U.S. Citizen, though a person who is a "legal immigrant" can qualify for Medicaid if he/she meets certain guidelines (contact your local Department of Social Services to learn more).

Be sure to check with your local Medicaid agency to learn what the specific rules for eligibility are in your state.

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How do I apply for Medicaid?

Applying for Medicaid can be confusing and time consuming if you are not familiar with the system. You can contact your local Medicaid office to learn where to apply and what forms and documentation must be submitted. You may also want to consider seeking the advice of a geriatric care manager or elder law attorney. Though these professionals charge for their services, they know what is required for the process and can help guide you through the maze of regulations.

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What does Medicaid cover?

The following Medicaid benefits are provided in all states:

• Inpatient hospital services
• Outpatient hospital services
• Physician services
• Medical and surgical dental services
• Nursing home care
• Home-care services
• Laboratory and x-ray services
• Rural health clinic services
• Transportation to medical treatments

For people who also have Medicare, Medicaid pays for Medicare deductibles, co-insurance amounts and monthly premiums for Medicare Part B.

The following additional Medicaid services are covered in some states:

• Prescription medications
• Eye exams and glasses
• Hearing aids
• Dental services and dentures
• Prosthetic devices

Because each state's Medicaid program varies, you should check with your local Medicaid office to find out about rules and regulations specific to your state. You can also call your local agency on aging for information about Medicaid policies in your region.

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Does Medicaid pay for long-term care?

Medicaid does pay for long-term care; however, not all providers of long-term care accept Medicaid. You must ask the facility you're interested in if they accept Medicaid payment and, if so, how many suites are available for Medicaid recipients.

Due to the reimbursement guidelines of the Medicaid program, many nursing homes and other long-term care facilities limit the number of Medicaid beneficiaries they will accept. Consequently, the Medicaid recipient may have limited options, especially if the facility is in great demand, and private rooms may not be available for Medicaid enrollees. These restrictions may make Medicaid payment for long-term care a less desirable option than paying privately or with private long-term care insurance. Advance financial planning that considers the possibility that long-term-care might be needed can help ensure that there are other options.

A married person whose spouse is in a nursing home is entitled to keep the home and a portion of the couple's assets. This is known as the Community Spouse Resource Allowance. The dollar amount of the assets allowed to be kept varies by state.

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Does Medicaid pay for prescription drugs?

Medicaid coverage of prescription drugs varies by state. To find out what the rules are in your state, contact your local Medicaid agency or agency on aging.

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If a child is taking care of a parent in their home, can they charge room and board?

A parent may be charged for room and board and for care provided. However, if formal arrangements are not followed, payments from a parent to a child may be considered as uncompensated transfers for Medicaid eligibility purposes.

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How do the rules differ for single and married persons with respect to the Medicaid program?

There are special rules under which a married individual may be able to retain a portion of the income of his or her spouse who is entering a nursing home. There are also special rules regarding retention of assets by the community spouse. A single person may retain a limited amount of resources.

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What is the "Three-Year Look-Back" rule?

If you apply for Medicaid, the Medicaid office will look at any transfers of cash or property you may have given away or sold to third parties (including family members or friends) in the previous three years of the date of your application. Such transfers may disqualify you for Medicaid eligibility. However, a qualified Medicaid attorney may be able to obtain Medicaid coverage on your behalf even if transfers were made within the three-year period.

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Can a parent sell his or her home to his or her child for $1.00?

While a parent may sell his or her home to a child for a nominal amount, there are many disadvantages to such a sale. For example, such a sale may ultimately cause adverse tax consequences. In addition, the sale may be considered an uncompensated transfer for Medicaid purposes and result in a period of ineligibility.

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Learn more at: www.nlm.nih.gov/medlineplus/medicaid.html