Most people believe they are not eligible for Medicaid, because they were told they need to spenddown their life savings before they can apply for Medicaid medical assistance. While it’s true that a Medicaid applicant in 2018 cannot have more than $15,500 in resources it is also true that applicants are allowed to transfer their life savings and then apply for Medicaid medical assistance.
Basically there are two types of Medicaid applications. Community Medicaid, which at the core is health insurance, but once approved for Community Medicaid the recipient is able to request home care services as well. The other application is a nursing home application.
Requirements for Community Medicaid eligibility is based on two financial issues. Income and Resources. In 2018 a Community Medicaid applicant is allowed no more than $15,500 in resources and $862 in monthly income. What if the applicant has $100k and a monthly income of $2,500? How can this applicant become eligible?
The applicant will have to transfer approximately $85k of the resources to a spouse, a trust, any family members, or a friend in any month and the following month they become eligible. What happens to the difference of $1,638 of the applicant’s income? Applicants have two choices: One, is to surrender the surplus income (the amount above the allowed $862), to Medicaid on a monthly basis. The other is to protect the surplus income, by joining a Medicaid approved pooled income trust. Depositing the surplus income into a pooled income trust allows the applicant to use the money to pay any of the applicant’s bills.
Requirements for nursing home Medicaid is a little more challenging, because it deals with five (5) years of banking history, but not impossible to save all or some of the applicant’s life savings.
Applicant’s with a spouse living in the community can transfer all of their assets to their spouse and become nursing home Medicaid eligible the following month. Single applicants can protect approximately fifty percent of their assets depending on their income and the cost of the nursing home.
Who then is eligible for Medicaid? Anyone who wishes to apply and seeks a professional to assist them with the process.