What are the rules for Medicaid qualification?

Medicaid is a federal program that provides health coverage for people with limited assets and incomes. It covers the cost of nursing home care for those who meet the program’s economic requirements for eligibility.

Though it’s a federal program, Medicaid is administered by the states. Federal law empowers each state to enforce Medicaid eligibility rules according to its own interpretation. This means that application of these rules can very significantly from state to state and, in some states, from county to county. Your Medicaid planning advisor can best help you determine how the rules apply to your specific circumstances in your specific locality. Before you get into the specifics, however, it’s a good idea to familiarize yourself with the general federal guidelines for Medicaid qualification.

ASSETS
Generally speaking, assets fall into two categories: “countable” and “non-countable”. To qualify for Medicaid benefits, a nursing home resident can have $2,000 ($3,000 if husband and wife are in a facility) in countable assets in 2009. The spouse of a nursing home resident, or “community spouse”, can retain between a minimum of $20,880 and a maximum of $109,560 (2009) of the couple’s joint countable assets. (These amounts are adjusted annually for inflation.)

ESTATE RECOVERY
What happens to a Medicaid recipient’s estate when he or she passes away? Like so much else, that depends on whether they have properly planned to protect it. When a Medicaid recipient dies, the state must attempt to recover the benefits paid to that individual from his or her estate - that is a requirement under federal Medicaid law.

PROPERTY LIENS
In addition, the state can place a lien on an unmarried Medicaid recipient’s home unless certain dependent relatives live on the premises or the state permits a “Homestead Exemption”. Sale of the property while the recipient is still living could result in the loss of Medicaid coverage (due to
excessive assets) and an obligation to use the sale proceeds to satisfy the lien.