Various funding sources available to pay for long-term care at home

By Betty Garrett Wood

Published: March 20, 2008

As we age, most of us want to stay in our own homes for as long as possible. We want to maintain our independence and self-sufficiency. If we are unable to stay in our homes without assistance, most of us are willing to obtain the care and assistance we need to continue to stay at home, rather than move to a health care facility.

There are several possible options for paying for long-term care at home. They include:

•Buying a long-term care insurance policy.

•Paying from your private funds or savings.

•Veterans' benefits.

•Medicare benefits.

•Medicaid benefits.

The first option is available only if you have planned ahead and bought a long-term care policy that provides coverage for home health or assistance benefits. Information on long-term care insurance is available by calling Senior Counseling, a division of the state Insurance Department, at (800) 763-2828 or 521-6628. The department has a free brochure available.

The second option is available only if you have sufficient assets to privately pay for such care.

Veterans' benefits are available to veterans and their spouses if they meet certain service and financial eligibility requirements. Veterans' benefits may include home health care. Information on eligibility requirements and possible benefits is available online at www.va.gov or by calling (800) 827-1000.

Medicare pays for home health care under limited circumstances and for limited purposes. Generally, Medicare will provide home health care directly related to medical care and only to homebound people. Medicare should not be relied upon as the sole source for home health benefits to help you remain in your home long-term.

Medicaid offers home health benefits to people who meet certain medical and financial requirements. The state Department of Human Services determines Medicaid eligibility. If you meet the financial criteria, an evaluation will be conducted in your home to determine if you qualify medically for home health benefits. You are generally medically eligible for Medicaid home health benefits if, without such benefits, you would have to be admitted to a nursing home.

The financial eligibility requirements for Medicaid home health care are generally the same as for Medicaid nursing home care benefits. There are income and asset tests. A person with equal to or less than $3,000 in fixed gross monthly income meets the income test. Fixed gross monthly income means, for example, Social Security benefits, private pension benefits, etc. It does not include income from investments. A person who receives more than $3,000 in fixed gross monthly income is not now eligible for Medicaid home health or nursing home benefits in Oklahoma. Other states have different rules about income.

In addition to the income test, there is an asset or resource test. Before a single person will be eligible for Medicaid long-term care benefits, he must spend down all his nonexempt assets to just under $2,000. The assets may be spent down on anything for the benefit of the single person who needs care; it does not have to be spent solely on care or medical expenses. If the person is married and a spend-down is necessary, the assets may be spent on anything for either spouse.

Assets that are non-exempt for Medicaid purposes include bank accounts, certificates of deposit, investment accounts, life insurance policies with cash value, annuities, retirement accounts, etc. For Medicaid purposes, the most common type of exempt assets are the home, one vehicle and tangible personal property such as furniture, furnishings, etc. Another type of exempt asset is an irrevocable burial contract or policy with no more than $7,500 in value per person.

Once a person has spent down his or her nonexempt assets so that his account balance is less than $2,000 and becomes eligible for Medicaid home health benefits, the person may keep his monthly income to pay for living expenses. This is true whether the person is married or single. This does not apply if the person is receiving or begins to receive Medicaid nursing home benefits, as part of the income will likely be required to be paid to the nursing home.

If a married person needs long-term care and applies for Medicaid benefits, the income test applies only to the "ill” spouse's fixed gross monthly income, and not to the "well” spouse's income. There is no limit to the "well” spouse's income, unless that well spouse later needs long-term care for himself.

If a married person applies for Medicaid benefits, the asset test includes all nonexempt assets of both spouses, no matter how ownership of the asset is titled. For example, if a person needs long-term care and his spouse has assets that were owned by that "well” spouse prior to this marriage, the value of those assets are still included in the total of nonexempt assets and may be subject to being partially spent down, before the "ill” spouse may receive Medicaid long-term care benefits.

The value of all nonexempt assets is calculated, and the total is divided into halves. One half is allocated to the "well” spouse, and the other half must be spent down to just under $2,000. The money may be spent on anything for either of the spouses, not just on care or medical expenses for the spouse needing long-term care. The amount of assets allocated to the well spouse is limited to $104,400 in 2008, and that limit is adjusted annually.

In some cases, a higher allocation is available. If one-half of all nonexempt assets exceeds that number, the excess must be added to the spend-down amount. If one-half of all nonexempt assets is less than $25,000, then the "well” spouse is allocated a minimum of $25,000 of the non-exempt assets.

Medicaid home health benefits may allow a person to enjoy the comforts of home longer and be with loved ones. For the first time, more Medicaid funds are being paid for Oklahomans to receive long-term care in their homes than in nursing homes.

There are many reasons why Medicaid should not be relied upon to provide long-term care benefits except as a last resort. It is advisable to investigate buying long-term care insurance. The Medicaid information provided here is just an overview of only one part of the eligibility rules, and there are other major aspects of Medicaid long-term care benefits that are not discussed here.

For more information, contact a county DHS office or eldercare coordinator. A qualified elder law attorney can advise you about your particular situation. The National Academy of Elder Law Attorneys, (520) 881-4005 or www.naela.org, can provide you with a list of Oklahoma attorneys who are members of that organization.

Betty Garrett Wood is an attorney/partner with Clark, Stakem, Wood and Patten, P.C. This article is for general information purposes and is not meant as legal advice for any person or situation. If you have questions or have another legal topic you want addressed in this column, e-mail her at bgwood@cswp-law.com.

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