65 and Older: Applying For Medicaid In Ohio
Medicaid is a federal and state program that provides long-term health care for those age 65 and older who meet certain income and asset requirements. Medicare is a federal health insurance program available for anyone age 65 or older regardless of income or asset level but does not cover long term care. Thus, if a senior needs long term care, they pay for it from their own resources until they reach a level qualifying them for Medicaid eligibility, at which time Medicaid takes over and pays the long-term health care facility’s bill going forward. The basic rules are as follows. All numbers are Ohio Medicaid figures for 2022.
An individual applying for Medicaid must satisfy an income eligibility test. The applicant’s eligibility must not exceed $2,523 per month. If the applicant is married, the applicant’s spouse’s income is not counted. Also, the non-applicant spouse may be entitled to a minimum monthly maintenance needs allowance (MMMNA). If the applicant would otherwise qualify for Medicaid other than failing the income test, they can set up a qualified income trust (QIT), sometimes known as a “miller’s trust”, whereby the excess income is deposited into a bank account which is in the name of the QIT.
Are Medicaid Qualifying Annuities Exempt?
With respect to assets, certain assets are considered exempt, and are not counted as part of the asset test. The primary residence is exempt as long as a spouse is living there. For a single person, there must be an intent to return home for the house to be exempt. Term life insurance is exempt but whole life insurance is not. Irrevocable funeral plans and burial plots for family members are all exempt. One car of unlimited value is exempt if there is a community spouse, and, if not, the applicant can have a car if necessary for the applicant’s transportation. Household goods and furnishing are exempt. Medicaid qualifying annuities are exempt. Other than that, the applicant must spend down to $2,000 before satisfying the asset test.
How Much Does A Community Spouse Get To Keep?
As part of the spenddown to $2,000, if there is a spouse, the spouse is entitled to a portion of the assets. After exempt assets are set aside, from the remainder of the pool of assets, the community spouse gets to keep half, with a floor and a ceiling. The floor is $27,480 and the ceiling is $137,400. Thus, if a couple have a total of $27,480 in countable assets, the community spouse gets to keep all of it. Also, once the community spouse gets his/her half, the remaining assets may be able to be transferred in to a Medicaid qualifying annuity for the community spouse if necessary to maintain the community spouse’s standard of living.
One also needs to keep in mind Medicaid’s 5 year look back period. Any transfers made by the applicant for less than fair value made within the 5-year period prior to applying for Medicaid is going to create a period of ineligibility in which Medicaid is not approved and the funds to pay for long term health care must come from some other sources. Thus, one cannot give away assets if one senses the need for long term care in the near future with the goal of protecting those assets from Medicaid. Any such planning needs to be done at least 5 years in advance.
These Medicaid issues and planning can be very technical and fact driven. If you have questions, please seek out the assistance of an estate planning and/or elder law professional.
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Joseph Balmer manages the Probate, Trust and Estate Administration department at Dayton, Ohio, law firm, Holzfaster, Cecil, McKnight & Mues, and has been certified by the Ohio State Bar Association as a specialist in Estate Planning, Trust and Probate Law since 2006.
