Medicaid & Long-Term Care Planning
Medicaid offers a wide variety of services, including doctor visits, hospital stays, medical transportation, medical equipment and supplies, prescriptions, limited vision and dental care, hearing aids and long term care services (adult day care, adult foster home, residential facility care, assisted living facility care, and nursing home care). Medicaid does not pay the individual money; instead, it sends payments directly to the health care providers.
Eligibility Requirements
To be eligible for Medicaid in Oregon, the Medicaid applicant must meet three eligibility requirements. These include:
Disability: A Medicaid intake worker assesses the Medicaid applicant to identify his or her ability to perform activities of daily living (eating, dressing, grooming, bathing, personal hygiene, mobility (ambulation and transfer), toileting, behavior and cognition. The information gained from the assessment is used to determine the service priority level. If the Medicaid applicant’s service priority level is between levels 1-13, he or she will meet the disability requirement.
Income: In order to qualify for Medicaid, the applicant’s gross income cannot exceed $2,349 (this amount is adjusted each year). Only the applicant’s income is considered. The spouse’s income is not. If the applicant’s gross income exceeds $2,349, Medicaid requires an income cap trust in order for the applicant to qualify for Medicaid. Please see income cap trusts for more information.
Resources: Under the Medicaid rules, some resources are counted (cash, bank accounts, IRA’s, investments, real property, vehicles, and cash values for whole life insurance polices) for eligibility purposes, and others are not counted (a home if the client or spouse lives there), one car, medical equipment, irrevocable burial plans, burial space, burial merchandise, personal property, and term life insurance).Contrary to how income is counted, all resources are counted regardless of whether they belong to the applicant, the spouse or both of them. The resource limit for a single person is $2,000. If the Medicaid applicant is married, his or her spouse is allowed to retain an additional amount between $25,728 and $128,640. Any amounts that exceed the resource limits for the applicant and the spouse must be spent down before the applicant will qualify for Medicaid services. In some cases, it is possible to increase the amount of resources the spouse is allowed to retain. There are a variety of legal planning tools to protect the spouse. Planning to protect the spouse is very fact specific and requires the assistance of an attorney. Legal planning tools are also available for unmarried applicants.
Once the applicant has been approved for Medicaid, the caseworker will determine the amount of the Medicaid recipient’s liability (the amount he or she will pay to the state each month for the services he or she is receiving). Medicaid rules provide for standard deductions from the applicant’s income, and in certain circumstances, the Medicaid applicant is able to transfer a portion of his or her income to the community spouse, to ensure that he or she has enough income to meet his or her living expenses.
The Medicaid caseworker will stay in contact to ensure the Medicaid recipient is receiving the appropriate level of services, and will reassess the Medicaid recipient’s financial eligibility each year. During the evaluation, both spouse’s income will be looked at, but only the Medicaid recipient’s income will be counted. Any assets that are transferred to the recipient’s spouse will not be considered. When the Medicaid recipient dies, the state will have a claim against his or her estate up to the value of services provided. If the Medicaid recipient is survived by a spouse, the claim will not become due until the death of the surviving spouse.
Income Cap Trusts
An Income Cap Trust is necessary when a Medicaid applicant’s gross income is over the allowed limit of $2,349. The state of Oregon adjusts this limit annually. The sole purpose of the Income Cap Trust is to qualify the applicant for Medicaid benefits. During the Medicaid application process, the client will meet with an attorney to establish the Income Cap Trust agreement. Attached to the Income Cap Trust are schedules that lists the applicant’s income, and the authorized distributions.
Once established, the Trustee opens a bank account, deposits the recipient’s income, and makes payments as directed under the trust agreement. From this, payments are made as directed on Schedule B. Examples of distributions include payments to support a spouse, the purchase of a funeral plan, payment of incurred medical expenses, and maintenance of a home during temporary absences. The function of the Income Cap Trust is to capture the Medicaid recipient’s income each month, make allowed distributions, and end each month with a zero balance. The state of Oregon is the named remainder beneficiary, and upon the Medicaid recipient’s death, will receive the balance of the account, if there is one.