Financial Requirements for Long Term Care - Medicaid in Ohio: Exempt Resources

Unlike Medicare, Medicaid covers both skilled and intermediate or custodial care.  Not  everyone can be admitted to a nursing home regardless of payment source.  A pre-admission screening and resident review (PASAR) is conducted to identify those persons who would better be treated in a mental health or disability disorder service facility.  A level of care evaluation confirming that the person is in need of a nursing home is also required.

     In order to be eligible for Medicaid, a person must meet residence and income requirements.  A person may have substantial income and still qualify for Medicaid based on income.  In determining income eligibility Medicaid considers total gross income, medical insurance premiums, Medicare Part B premium, Medicaid reimbursement rate for the nursing home, recurring medical expenses and past unpaid medical expenses.

     To qualify for Medicaid, the applicant’s COUNTABLE resources must be less than $1,500.  A countable resource is cash or anything that may be converted to cash that an applicant can use of his support.  The community spouse of a married applicant may keep fifty percent of the couples recovery subject to a minimum and maximum amount.

     Assets are classified as exempt, partially exempt or countable.  An exempt asset will not be counted in determining the $1,500 resource limit;

1.  HOME

          a. The individual’s primary residence is exempt for 13 months or if married as long as the home is occupied by a spouse, by the individual’s child who is under age 21 or is permanently blind or disabled or who is age 65 or older and is financially dependent on the individual for housing;

          b. Is occupied by the individual’s sibling who holds an interest in the property and has lived in the property for at least a year before the individual’s nursing home admission;

or

          c. A son or daughter who has been living in the home, and providing care that has delayed the parent’s need for nursing home care for at least two years prior to admission to the nursing home.  A Medicaid prescribed form must be completed by a doctor to meet this exemption.  It is contemplated that the property will be transferred to the son or daughter following nursing home admission.

2.  HOUSEHOLD GOODS AND PERSONAL EFFECTS

3.  AUTO

          An auto with equity of less than $4,500 unless used for employment, for treatment of a specific medical condition for essential daily activities, or is modified for transport of a handicapped person or if there is a community spouse.

4.  CASH VALUE OF ALL POLICIES ON THE APPLICANT’S LIFE WITH A FACE VALUE EXCEEDING $1,500.

5.  AN IRREVOCABLE CONTRACT AND PAYMENT FOR BURIAL AND FUNERLA SERVICES FOR THE APPLICANT AND IMMEDIATE FAMILY MEMBERS.

6.  UP TO 6,000 EQUITY IN INCOME PRODUCING PROPERTY IF ESSENTIAL FOR THE SUPPORT OF THE APPLICANT OR HIS SPOUSE

7.  SOME NON-TRANSFERABLE LIFE ESTATES

          A non-transferable life estate in property obtained prior to the look back period is exempt as long as the individual does not have a right to transfer or sell the interest.  But, if the interest is obtained because the individual transferred his property during the look back period and retained a life estate, the transfer will be considered an improper transfer.  The individual may purchase a life estate in another person’s home but transfer of the recipient’s home to another retaining a life estate is subject to transfer of asset rules unless the individual lives in the home for at least one year following the purchase.

8.  RETIREMENT ACCOUNTS

          Whether retirement accounts including IRA accounts are exempt or countable assets depends on whether an account is “available”, in other words, may the individual withdraw the funds.  Some generalities: if the accout can be turned into cash, even if there are penalties for doing so, it is available.  Where the individual receives payment based on life expectancy, e.g. a defined employer plan, the principal is considered exempt even if it can be withdrawn.  Assets in plans which prohibit withdrawal until some event occurs such as termination of employment or reaching the normal retirement age, are exempt until the condition occurs.  Account assets which may be withdrawn for hardship are available assets but not if the plan requires that the individual first borrow against assets since borrowing creates a debt with obligation to repay.