In this section: How to determine eligibility. Breaking down the two financial criteria, assets and income. Shows the different situations of married couples versus single applicants. The Threshold Eligibility Tests There is an initial three part test to determine eligibility: Basic "medical" need; Age or Disability; and Financial. Each one of these parts must be passed before you can get Medicaid to pay for care. If any one is missing you will not be eligible for the program and will have to pay for care privately; that is, out of your own pocket. First Test - "Medical" Need I put the word medical in quotations because this is not as strict a test as there is with Medicare. The care provided to the individual need not be strictly medically necessary, but may be custodial in nature. The person must have some form of impairment that limits the activities of daily living to a point where a nursing home is needed. This test is usually not a problem and is designed to keep healthy individuals out of the system. The standards to determine whether or not the need is present are: 1. The need must require twenty-four hour nursing care in a "skilled care facility." A skilled care facility is one where professional nursing services are available and include, physicians, respiratory care, audiologists, physical and occupational therapists. 2. The individual's needs are so medically complex that they require supervision, assessment or planning by a Registered Nurse. 3. The individual must need the care on a daily basis. 4. The individual needs ongoing involvement of a Registered Nurse or other professional in the evaluation of the individual and the implementation of a treatment plan. 5. The individual needs continuous observation in order to monitor for complications or change in the status of his condition. 6. Lastly, the care the individual needs should not be of a degree which would normally be provided by a hospital. Second Test - Aged or Disabled. In order to be eligible for benefits you also need to be either suffering from some form of disability or you need to be over 65. A 60 year old with Alzheimer's would meet this test as the Alzheimer's qualifies as a disability. A seventy year-old, on the other hand, need not have a disability. So long as he needs nursing home care he will pass this phase of the inquiry. (See first test.) Third Test - Financial Here is where things get sticky. The third test presents perhaps the most confusing requirements of the three tests due to the number of variables that must be considered. The specific dollar amounts change depending on the specific characteristics of the applicant. State laws also differ in this regard. The states are divided into two camps, one where the income of the applicant is used to deny eligibility if it is over a certain number, called the income cap, and those where it is merely used to determine the amount of benefits. For the sake of discussion in this book all numbers and eligibility requirements will use the laws that are applied in the state of Florida. Florida is an "income cap" state. (Caution is advised if using this material for other states. You should consult with an elder law attorney in your state to update and localize the laws to that particular jurisdiction.) The Asset Test Married vs. Single In determining the exact amount of assets which can be retained, we first have to decide whether or not the applicant is married or single. The Medicaid laws were originally targeted at increasing the amount of seniors that could qualify for the Medicaid program. They were especially concerned with making sure that the spouse who was not in the nursing home was not impoverished to the point where she became a nonproductive member of society. The eligibility numbers are quite different depending on whether you are married or single. A married couple may keep up to $86,120.00 in countable assets. ($84,120.00 for the spouse and $2,000.00 for the applicant spouse.) A single person, including widows, may only have $2,000.00 in countable assets. (This number increases to $5,000.00 in cases where the income of the individual is under $638.00.) Below is a summary of the eligibility numbers: What's an Asset? Notice that I said countable asset above. This is a critical distinction because many of us own a primary residence that we think would automatically put us over the asset limit. Remember the Medicaid program was designed to help seniors from becoming impoverished due to the high costs of nursing home care. The home of the applicant in nearly every situation is not counted as an asset of the applicant. It is so discouraging for me to hear a client tell that they have sold the home in a last ditch effort to generate cash to continue to pay for nursing care. Why did they do this? Because they did not know any better. Such ignorance of the law can cost your family dearly. I must stress that the primary residence is not counted as an asset when applying the asset level test. Subtract it from your total assets when calculating eligibility. There are other types of non-countable assets, such as the car and a burial account, but none are potentially as large as the home. Be careful when looking to what assets to count. Often clients erroneously believe that a joint bank account is only treated as half an asset: not so, 100 percent of the asset is counted! And do not think that the other person on the account, your son for example, can withdraw the bulk of the account and put it into his name. The law specifically forbids this. Also, remember that little insurance policy you have been paying on for years? Well, it probably has built up quite a nice cash value which will be counted as an asset. The asset test is not as easy as it would seem. Similarly the income test poses its own set of unique problems. Income Test In addition to looking at the amount of assets you have, some states, including Florida and Colorado, impose an additional factor to consider when determining eligibility, the income of the applicant. In Florida and Colorado, for example, the income amount is capped at $1,536 per month. In "income cap" states if the applicant is over the cap, even by a dollar, he is not eligible for benefits, despite the fact that he passes every other test. This often imposes the harsh and arbitrary result of ineligibility for the applicant over the income cap even though he has no other assets and no other means to generate additional cash flow. Furthermore, while he may have a relatively high income he may not even be close to the amount required for care averaging $4,500 to $5,500 per month. The applicant has fallen into what we call the Medicaid Gap. Too much income to qualify for benefits, too little to pay for care. What do you do in this situation? Prior to 1993 there were few if any options for the person in this situation Sometimes the nursing home would provide services at a reduced rate; sometimes they would not. Remember, the person is considered INELIGIBLE for Medicaid benefits. In 1993 Congress again modified the laws regarding the Medicaid program, and while they took away with one hand; further restricting the criteria for determining eligibility, they gave with the other; giving people who were over the cap a workaround to avoid the Medicaid Gap. This workaround is called the income trust See the section on strategies for obtaining eligibility for a complete discussion of the income trust.

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