Once someone is approved for long-term nursing home Medicaid benefits, the recipient must actively remain qualified to continue to have Medicaid pay for nursing home care.
For most single recipients, this means that their assets cannot exceed $2,000 in any month. Generally, this is not a problem as they have spent down all of the assets in order to qualify for their benefit. For married couples, maintaining and managing their assets to remain qualified can pose more challenges.
It is important for the Medicaid recipient’s spouse to have their own bank account, separate from the non-Medicaid spouse. Having a separate account will allow the recipient to maintain a monthly asset balance of $2,000 or less.
Generally, the recipient’s social security and pension, if any, are deposited into their separate account and used to pay their portion of the monthly nursing home bill or transferred to their spouse, if allowed. The non-Medicaid spouse, after their spouse is approved for Medicaid, is not restricted to any asset limit. It is not advisable for the spouses to have any joint accounts so the non-Medicaid spouse should remove the Medicaid spouse from all joint accounts and joint assets.
Often the biggest challenges, and mistakes, that could jeopardize a recipient’s benefits come from owning a home. Since a Medicaid recipient is allowed to own a home, often the home remains a joint asset for the married couple after Medicaid qualification.
If the home is later sold, the title company must be directed to issue the check for the sale proceeds to be payable only to the non-Medicaid spouse to keep the Medicaid recipient’s assets from exceeding $2,000 following the sale. There are many strategies relating to home ownership and the sale of a home which can be used to prevent a recipient from being disqualified. It is worth noting that homes are often the asset that is subject to estate recovery when a Medicaid recipient dies. Proper planning should be used to keep the state from making a claim against a recipient’s estate after their death.
Another challenge to remaining qualified happens when a non-Medicaid spouse dies and leaves assets to their Medicaid spouse. In a common scenario, a deceased spouse leaves a cash account, such as a bank account, to the Medicaid spouse. If the amount in the cash account, combined with the Medicaid spouse’s existing assets, is over $2,000, benefits will be terminated until the situation is corrected.
Sometimes this happens when a non-Medicaid spouse opens a new account, just in their name, to protect their Medicaid spouse, and then, out of perceived obligation or bad advice, names their Medicaid spouse as the beneficiary of the account.
In this instance, at the death of the non-Medicaid spouse, the account becomes the Medicaid recipient’s asset, likely putting them over the $2,000 threshold and terminating their benefits.
In some cases, the non-Medicaid spouse may not name any beneficiary at all for the cash account. In this instance, the account will transfer through probate to the Medicaid spouse, again resulting in a termination of Medicaid benefits.
Qualifying for Medicaid is only the first step in the process. The second, and equally important, step is to remain qualified.
An experienced elder law attorney should assist you in reviewing the terms of the Medicaid approval and guide you in determining asset ownership and account titling to ensure ongoing Medicaid eligibility.
