Savvy Senior: Paying for nursing home care with Medicaid

DEAR LOOKING:

The rules and requirements for Medicaid eligibility for nursing home care are somewhat complicated and will vary according to the state you live in. With that said, here's a general, simplified rundown of what it takes to qualify, along with some resources you can turn to for help.

Medicaid rules

Medicaid, the federal and state joint program that covers health care for the poor, is also the largest single payer of America's nursing home bills for seniors who don't have the resources to pay for their own care.

Most people who enter nursing homes don't qualify for Medicaid at first, but pay for care either through long-term care insurance or out-of-pocket until they deplete their savings and become eligible for Medicaid.

To qualify for Medicaid, your income and assets will need to be under a certain level that's determined by your state. Most states require that a person have no more than about $2,000 in countable assets that includes cash, savings, investments or other financial resources that can be turned into cash.

Assets that aren't counted for eligibility include your home if it's valued under $525,000 (this limit is higher — up to $786,000 — in some states), your personal possessions and household goods, one vehicle, prepaid funeral plans and a small amount of life insurance.

But be aware that while your home is not considered a countable asset to determine your eligibility, if you can't return to your home, Medicaid can go after the proceeds of your house to help reimburse your nursing home costs, unless your spouse or other dependent relative lives there. (There are some other exceptions to this rule.)

After qualifying, all sources of your income, such as Social Security and pension checks, must be turned over to Medicaid to pay for your care, except for a small personal needs allowance — usually between $30 and $90.