The next article in this Medicaid Series will highlight the main rules for nursing home Medicaid and the MI Choice Waiver program.
A person interested in filing for Medicaid benefits must pass two tests. The first is the income test and the second is the asset test. The income test for someone interested in MI Choice Waiver benefits is different than the test for someone needing skilled nursing care.
The waiver program has a fixed income limit of $2,199 for 2015. If the potential applicant’s monthly income exceeds this amount then eligibility cannot be attained. Most often social security and pension make up a person’s income. Required minimum distributions from investment accounts would also be counted as income but this is rarely a problem as it is no longer feasible for a single person to have investments if they are going to meet the asset test described below.
Although everyone cannot pass the waiver income test they can pass the income test to receive Medicaid in a skilled nursing facility. This test simply states that a person’s monthly income must be less than the cost of one month of care in the skilled nursing facility. The 2015 state average for nursing home care is $8,084 according to Medicaid policy. Anyone with monthly income below this amount will pass the income test.
Unlike the income test, the asset test is the same for nursing home Medicaid and MI Choice Waiver. A single person must have $2,000 or less in countable assets. This is where it becomes important to distinguish between countable and non-countable assets. Non-countable assets include: 1) a house in the applicant’s name; 2) a vehicle in the applicant’s name; 3) life insurance with no cash surrender value; 4) a prepaid irrevocable funeral contract; 5) burial plots for the applicant and certain family members; and 6) life insurance with a face value of $1,500 or less. The additional points to consider regarding the non-countable assets will be addressed in later articles.
Everything else in the applicant’s name would be countable towards their asset eligibility for Medicaid. This includes the money in their checking and savings, investment accounts, cd’s, stocks, non-residential property, business interests, and anything above the one exempt vehicle.
When helping a family member explore this benefit it is crucial to compile a complete list of their assets. This can be very difficult when assisting a person with dementia that cannot participate in the planning process. There is a lot to handle when helping a loved one determine the best fit for their care. A surprise in the application process can cost money and time to prolong the stress. Consulting a professional advisor about Medicaid eligibility, strategies available to preserve assets, and problem identification can help smooth the path towards eligibility. Be sure to check for additional articles that discuss in detail the rules about non-countable assets and income and asset eligibility for married persons.