The Mysterious Medicaid Maze
By Toni Lynn Davis, Executive Director Green Hill Inc.The Health Insurance Association of America defines Medicaid as a “government insurance program for persons of all ages whose income and resources are insufficient to pay for health care. Medicaid is state-administered and financed by both the states and the federal government.”
Medicaid is a program created by the Social Security Amendments of 1965 which added Medicaid to the Social Security Act – Title XIX, as an entitlement program to help states provide medical coverage to low-income families and individuals who meet eligibility categories in disability, age, and also for pregnant women.
Medicaid is the country’s primary source of funding health care for low-income populations. Each state administers their own Medicaid programs and benefits vary from state to state. NJ Medicaid covers a broad range of services in long-term care with mandatory and optional benefits at little to no cost to the member.
Various amendments to XIX have been made over the years on issues such as drug rebates, insurance premiums, fee for service agreements with public schools, an estate recovery program which enables states to sue the estates of participants and their decedents to recoup benefits, the affordable care act, under fire now, and many more items that have made the Medicaid process increasingly more complicated to understand, apply for and provide for.
Medicare, not to be confused with Medicaid is defined by Wikopedia as “national social insurance program, administered by the U.S. federal government since 1965, that guarantees access to health insurance for Americans aged 65 and older and younger people with disabilities as well as people with end stage renal disease (Medicare.gov, 2012) and persons with Lou Gehrig’s Disease. In 2010, Medicare provided health insurance to 48 million Americans” serving a large population of old and disabled individuals. Medicare is a fixed benefit program where participants may cover often more than half of their medical expenses directly.
At Green Hill we work with our residents and prospective residents to understand the Medicaid program and if the program is available to them, to assist them in navigating the complicated steps of applying for Medicaid benefits.
In order to be eligible for payment of institutional benefits, such as nursing facility care, under the Medicaid program in New Jersey an applicant must meet not only financial criteria, but also the medical necessity requirements. The Medicaid application process is lengthy process with a comprehensive application that takes a lot of time to gather the documents for and to complete. The process can be over-burdensome for the elder applicant and their family members. The application requires research and document gathering including bank records for the prior five years, birth certificates, mortgages and other assets, income and other important legal papers.
Many elders and their families in the Green Hill community who have undertaken this process even with the support of staff have found it to be overwhelming and frustrating. My recommendation is to learn about the requirements long before one needs to apply for Medicaid, and begin to gather together documents and organize ones financial affairs in advance. The best time to gather this information is while the elder is in his or her home where documents are more likely to be located.
There is a resource maximum level of $2,000 or less in assets to be eligible for Medicaid. Medicaid resources that count towards assets include, but are not limited to, bank accounts, property other than principal residence, stocks, bonds, certificates of deposit, and cash surrender value of life insurance that exceeds $1,500 in face value. Excludable resources include, but are not limited to, a home which serves as a principal residence of a spouse or other dependent relative (if a home is not occupied by a dependent relative and the period of institutionalization is expected to be six months or less, the home may also be excluded), life insurance which does not exceed $1,500 in face value, burial spaces, and burial funds not exceeding $1,500 (less excluded cash surrender value of life insurance and/or funds held in an irrevocable burial arrangement), one automobile to the extent that its current market value does not exceed $4,500, and one wedding and engagement ring.
The current Medicaid eligibility income standard for an institutionalized individual is $2,094 per month. If an individual’s gross monthly income exceeds this Medicaid “cap,” he or she is income ineligible for Medicaid. Income includes, but is not limited to, Social Security income, veterans’ benefits, pensions, annuities, interest, dividends, payments from trust funds, and rental income from real property.
Once eligibility is established, full Medicaid coverage is provided. However, the individual’s income must be applied to offset the cost of nursing facility care. It’s also important for people to understand that there is a five (5) year ‘look-back’ period for Medicaid approval, meaning that any assets that were transferred from the applicant’s accounts within the five (5) years prior to application can disqualify them from approval. Another reason to consider preparing for this process well in advance of ones application. If an applicant is disqualified for that reason, there is a penalty period where the potential applicant will not get any Medicaid funds and may not have enough income to cover expenses in the community they reside in.
So, plan for the possibility of having to apply for Medicaid long before you need to by organizing your financial documents. Work with a financial planner experienced in senior planning.
If you call Green Hill your home whether for independent, assisted living or nursing care our staff of specialist will work to assist you in completing your Medicaid application. At Green Hill we provide our elders with support in all areas of their lives including the mysterious maze of the Medicaid program.