COMMUNITY MEDICAID PROGRAM
Introduction
The Community Medicaid Program provides homecare aides, without cost, to seniors who are able to remain in their homes but need assistance with bathing, dressing, preparation of meals, shopping etc. It is particularly helpful for those suffering with Alzheimer’s Disease who are not in need of nursing care but rather can not be safely at home alone. Too often, these individuals are placed, unnecessarily, in nursing homes because their family feels there is no alternative. The fact is, Community Medicaid is that alternative. In addition, many families do not realize that the Community Medicaid program is available to their loved ones, even if they have assets and income. The New York Medicaid rules and regulations permit seniors to qualify for Community Medicaid benefits while protecting their assets and income.
Eligibility
Seniors are permitted to have assets valued at $14,850.00 to be eligible for Community Medicaid benefits. In determining the value of their assets, Medicaid does not include the value of their primary residence up to $750,000.00 and any money held in a retirement account such as an IRA or 401K. However, any other financial assets that are in the name of the Medicaid applicant or jointly held by the Medicaid applicant and others, are counted toward the eligibility limit of $14,850.00. Of importance, however, is that Medicaid does permit the applicant to transfer these assets to render themselves eligible for Community Medicaid benefits. This is very significant as there are many seniors who have saved through their lives and have accumulated money, require the assistance of a homecare aide, but will spend all of their savings for the cost of an aide. The Community Medicaid Program permits these individuals to transfer these assets, thus rendering them eligible for Community Medicaid and protect these assets for their ongoing needs and expenses.
Transfers
Consultation with an accountant prior to any transfer is always advised to understand the tax consequences, if any, of any transfer.
There are various transfers that can be accomplished for Community Medicaid eligibility. If the Medicaid applicant is married, assets either jointly held with the spouse or individually held by the applicant can be transferred to the spouse. When applying for Medicaid, the applicant submits a “Spousal Refusal” form signed by the spouse, which then allows Medicaid to determine the eligibility of the applicant based upon the applicant’s assets only, without consideration of the spouse’s assets.
Applicants may also choose to transfer their assets to their children, which is also permitted by Medicaid. Of course, this should only be accomplished with the understanding that the children will hold these funds and make them available for the applicant’s ongoing needs.
Transfers to an irrevocable trust can also be utilized to render the applicant eligible for Community Medicaid. This transfer does provide the most protection for the applicant as regards safeguarding the funds for use by the applicant when needs require. This is accomplished by creating an irrevocable trust with the applicant as the sole beneficiary and a family member as trustee. As trustee, the family member has a fiduciary duty to safeguard the assets and make them available for the needs of the applicant. The trust agreement can also provide for the disposition of the remaining assets in the irrevocable trust at the time of the death of the beneficiary and those assets will pass under the terms of the irrevocable trust agreement, and do not have to go through any probate process with the Surrogate’s Court.
It should be noted that there is a different Medicaid Program, Institutional Medicaid, which is for those seniors that are not home but in a long-term care facility. Institutional Medicaid will pay for the facility; however, the eligibility rules for Institutional Medicaid are different than those for Community Medicaid. When determining eligibility for Institutional Medicaid, Medicaid will look back over five years and will assign a transfer penalty for any transfers that occurred during that period. Of significance, transfers to a spouse during the five-year look back period are not penalized. As such, transfers to a spouse to render an applicant eligible for Community Medicaid will not be penalized if the applicant is required to move to a long-term care residence and apply for Institutional Medicaid benefits within five years.
Community Medicaid Application Process
A Community Medicaid application must be completed and submitted with various supporting documentation at the applicant’s local Medicaid office. The supporting documentation includes, proof of citizenship, proof of residency, copies of social security and Medicare cards, and the most recent statement from any accounts (including retirement accounts) in the applicant’s name. Again, excluding the retirement accounts, the total funds held in any other accounts cannot exceed $14,850.00. It takes Medicaid approximately forty-five days to process the application.
Income Rules/Pooled Income Trusts
To be eligible for Community Medicaid the applicant is permitted to have monthly income of approximately $845.00. Monthly income for seniors typically includes social security and pension benefits. Any income above the permissible amount is considered by Medicaid as monthly excess income. Once the applicant is accepted into the Community Medicaid Program, if their monthly income is less than $845.00, their Community Medicaid benefits are activated. If they have monthly excess income, Medicaid will advise them that that amount must be spent down on their care before the Community Medicaid benefits are activated. It can be spent down by paying their medical or homecare expenses, or it can be paid directly each month to Medicaid. Once the monthly spend down requirement is met, the Community Medicaid is activated. However, there is another way to meet this spend down requirement and activate the Community Medicaid benefits and preserve the excess monthly income for the applicant’s expenses. This is accomplished by the establishment of a Pooled Income Trust.
A Pooled Income Trust is an account opened in the name of the applicant with a Medicaid approved pooled trust company, of which there are several in the State of New York. Rather than pay the excess monthly income toward the applicant’s medical or home care expenses, the monthly excess income can be deposited in the applicant’s account at the Pooled Income Trust and then it can be used to pay the applicant’s monthly bills. As such, the excess monthly income is protected and continues to be available to pay the applicant’s monthly bills.
Community Medicaid Benefits
The primary benefit of the Community Medicaid Program is to provide home care aides to those seniors in need without cost. Once the applicant is accepted into the Community Medicaid Program and has activated the benefits by the establishment of the Pooled Income Trust, Medicaid will come and evaluate the needs of the applicant to determine how many days a week and for how many hours a day they will receive coverage. Alzheimer’s patients who live alone or often approved for 24/7 care. If the family believes that Medicaid is not providing sufficient coverage for the needs of their loved one, an appeal can be accomplished by requesting a Fair Hearing and presenting medical evidence to justify the request for greater coverage. Medicaid assigns a Long-Term Care Manager to the case and they will provide and pay for home care aides to the individual through private agencies. If the needs of the senior increase over time, the Long-Term Care Manager may be requested to re-evaluate the needs and increase the coverage.
Consumer Directed Program
Once all of the above requirements are met, the senior and family can choose not to utilize the aides provided by Medicaid, but can choose any individuals they wish to serve as the home care aide and be paid by Medicaid. This is called the Consumer Directed Program. There are some families that prefer to keep the individual who has been caring for their loved one prior to applying for Community Medicaid or prefer to continue to care for the individual themselves and be paid by Medicaid. While the aides provided by the Community Medicaid Program are licensed and certified, there are no such requirements for the home care aides chosen by the family under the Consumer Directed Program. Those who opt for the Consumer Directed Program can keep the caregivers that they have been using or wish to use, regardless of their qualifications, and they will be paid for by Medicaid. However, the family is solely responsible for directing the caregiver and must find a substitute should that caregiver not show up.
Summary
The Community Medicaid Program is a wonderful program and is availability to seniors who do have assets and income. Those assets and income can be protected and seniors, who have saved all their lives, can obtain the home care needed so they may remain safely in their homes, and protect their savings and income as well.
