Medicaid’s maximum monthly maintenance needs allowance (MMMNA) changes every July. This is the most in monthly income that a spouse living at home (known as the community spouse) is allowed to have when his or her own income is not enough on which to live, allowing him or her to take some or all of the institutionalized spouse’s income. The minimum monthly maintenance needs allowance as of July 2022 for Alabama is $2289 (up from $2178) As an example, a community spouse who has income of $1500 whose spouse entering the nursing home has $2200 in income, would be allowed to keep $789 of the institutionalized spouse’s income each month – enough to bring his or her income up to $2289.
As for resource limits established every January, in 2022 the community spouse may keep as much as $137,400 without jeopardizing the Medicaid eligibility of the spouse who is receiving long-term care. Known as the community spouse resource allowance or CSRA, this is the most that a state may allow a community spouse to retain. While some states set a lower maximum, the least that a state may allow a community spouse to retain in 2022 is $27,480. As of January 2022 Alabama allows the community spouse to keep one-half of the couple’s resources, not to exceed the maximum of $137,400.
If nursing home care is anticipated in the future it is important to calculate the income and resources of a couple to determine the financial impact long term care will have and to plan to retain as much as possible and still qualify for Medicaid coverage.
The Center for Medicare and Medicaid Services (CMS) has issued its Interim Final Rule Updating Requirements for Notification of Confirmed and Suspected COVID-19 Cases Among Residents and Staff in Nursing Homes. This is good news for people who are concerned about their relatives living in long-term care.
CMS will require nursing homes to report COVID-19 facility data to the Centers for Disease Control and Prevention (CDC) and to report to residents, their representatives, and families of residents in facilities. Failure to report in accordance with 42 CFR §483.80(g) can result in an enforcement action.
There have been some problems for Alabama residents trying to obtain information about infection rates in individual facilities despite the fact that it is reported that residents and staff members of long-term care facilities now account for about 13 percent of the cases in Alabama, and 100 deaths in long-term cre facilities account for more than a third of the state’s total deaths as of May 1. Since relatives have been unable to visit since March, a great deal of anxiety about the care of residents has increased.
In Alabama up until now staff are required to tell families if someone living or working at the facility has tested positive for coronavirus, but those facilities do not have to say how many cases have been reported. Greater transparency will benefit family members seeking to protect their institutionalized loved ones.
To assist caregivers who are making arrangements for long term care a booklet concerning Alabama Medicaid is being made available to provide clarity for some of the issues that may arise and to provide basic information about the application process. The booklet is made available here and will remain available in the Publications section of our website. It can be read online or downloaded and printed.
The Veterans Administration has a federal and state program addressing health care needs of veterans and provides an option for long-term care.
There are four VA nursing facilities in Alabama:
Bill Nichols State Veterans Home in Alexander City;
William F. Green State Veterans Home in Bay Minette;
Floyd E. “Tut” Fann State Veterans Home in Huntsville; and
Col. Robert L. Howard State Veterans Home in Pell City.
In the VA system State VA and Federal VA contribute toward the charged rate, leaving the veteran responsible for the remainder. Actually this VA system is a highly affordable nursing home care option after the state and federal government provide subsidies.
In 2019 the out of pocket cost for care in the VA facilities in Alexander City, Bay Minette and Huntsville is $355.02 per month, and the out of pocket cost for care in the Pell City facility is $732.
The average wait for a bed is four to five months for Alexander City; six months for Bay Minette; three to four months for Huntsville; and two to three years for Pell City.
In July 2019 The Alabama Department of Veterans Affairs announced plans to build an additional $60 million veteran’s home on 27 acres in one of nine Southeast Alabama Wiregrass counties. The new nursing facility will provide care for 150 – 175 elderly veterans and will be located in either Barbour, Butler, Coffee, Covington, Crenshaw, Dale, Geneva, Houston or Pike County.
The VA is required to provide nursing home care to any veteran who needs that level of care because of a service-connected disability, has a combined disability rating of 70 percent or more or has a disability rating of at least 60 percent and is deemed unemployable or has been rated permanently and totally disabled. Other veterans in need of nursing home care will be provided services if resources are available after the priority groups are served.
You don’t really have to spend down all your resources to qualify for nursing home Medicaid. There are multiple ways to preserve funds. One of those ways is through the use of what I call the Medicaid Spend Down Special Needs Trust.
Usually persons who need nursing home care end up needing Medicaid to pay for that care. Why? Because it is so expensive. Nursing home care can cost between $6000 and $8000 depending on the specific market area in Alabama. At $7000 per month, the average nursing home resident will spend $84,000 in a year. Under these circumstances, most persons will exhaust their resources at a rapid rate rendering them unable to pay for the care they need without the assistance of Medicaid.
There are some funds a married couple can preserve for the spouse who remains at home, but there is still an amount that has to be spent down if a couple has countable assets over $25,000. A single person has to spend all of his or her resources down to $2000 before he or she can qualify for Medicaid. Using up the assets a person saved over a lifetime is known as the dreaded Medicaid “spend down.”
But what many people do not know is that there is a way to qualify for Medicaid to pay for nursing home care in Alabama without the resident having to go through a complete “spend down.” That is through the use of a pooled Special Needs Trust.
There are many types of Special Needs Trusts (SNTs), including trusts for disabled younger persons, disabled children whose parents and grandparents want to provide for their future needs, persons on public benefits who recover money from personal injury lawsuits or who inherit money when a relative dies. Each type of SNT has highly specific requirements. But what they all have in common is the goal of protecting funds for a disabled person without those funds resulting in the loss of public benefits.
With the Medicaid Spend Down SNT, instead of spending down the money required to be spent by Medicaid on nursing home care before eligibility can be established, the money is paid into a SNT and can then be used to pay for special needs not otherwise paid for by Medicaid for the disabled person once he or she becomes eligible. Medicaid eligibility can be immediately established while these funds remain available to pay for special needs for the nursing home resident.
The drawback to this type of trust is the requirement that, on the death of the person for whom the trust was established, Medicaid must be reimbursed from funds remaining in the trust up to the amount Medicaid has paid for the nursing home resident’s care. Still, creating a pool of money to meet the special needs of the nursing home resident after being awarded Medicaid is far better than simply spending down those funds before qualifying for Medicaid and leaving the resident with no resources to pay for special needs. Since Medicaid allows a nursing home resident to keep only $30 of his or her income each month to pay for personal needs, you can see how that is not enough to have needs met without families pitching in to help pay for necessary items.
An example of what the SNT funds can pay for is a private room in a nursing home since Medicaid will only cover a semi-private room. Other special needs might be items and services that can improve the quality of life for the nursing home resident such as hair salon charges, manicures, telephone, newspaper subscriptions, audiobooks, movies, recreation, medical and dental expenses not otherwise covered, special equipment like wheelchairs or specially-equipped vans; therapy or rehabilitation services; training and education, travel, electronic equipment including computers and mobile devices.
With a little planning the quality of life for a nursing home resident can be improved, and the burden for a family’s out of pocket expenses decreased.
Do not be confused with an internet search. The rules are different from state to state. Most states allow a person 65 and older to create a pooled SNT but still penalize transfers into that trust. That is not the case in Alabama.
Contact us for more information about establishing a Medicaid Spend Down SNT.
Some benefits paid by Medicaid, including expenses for long-term care after age 55, can be recouped from the recipient’s estate upon death. The federal government makes estate recovery mandatory, and each state has enacted its own rules to comply with that requirement. A new publication is available to help you understand how Alabama Medicaid Estate Recovery works and what property is at risk for being lost upon death and repayment to Medicaid. This document can be read online or downloaded and printed. It will remain available in the Publications at this web site.
Making a long-term care placement is often surprisingly complicated for those who have not previously made a placement. Finding an affordable facility to meet the needs of the person in need of care can be a challenge. Planning is critical to know what to look for and to understand cost of care and payment options for various levels of long-term care.
This e-book will provide information for those persons who will be eventually making a placement, and provide specific information for care in Alabama. It will remain available in Publications at this web site.
At the top of this page you will see a link to our Publications. There you will find an e-book recently published, Guide to Alabama Advance Directives. It can be downloaded and printed or read online. It explains the different ways a person can become an agent for another in Alabama and how to evaluate which document you may need. This e-book will remain available at Publications but is being posted here.
Florida and Arizona are the latest states to request a waiver from the requirement that states provide three months of retroactive Medicaid coverage to eligible Medicaid recipients. Whether Alabama plans to follow suite is unknown to the public at this time, but this is a time when shrinking budgets prepare us to anticipate the worse.
Medicaid law allows a Medicaid applicant to be eligible for benefits for up to three months before the month of the application if the applicant met eligibility requirements at the earlier time. This helps people who are unexpectedly admitted to a nursing home and can’t file — or are unaware that they should file — a Medicaid application right away. Preparing an application for Medicaid nursing home coverage may take many weeks; the retroactive coverage gives families a window of opportunity to apply and get coverage dating back to when their loved one first entered the nursing home. “Retroactive coverage is one of the long-standing safeguards built into the program for low-income Medicaid beneficiaries and their healthcare providers,” says the Kaiser Family Foundation.
Now Arizona and Florida are joining a growing list of states that are asking the federal Centers for Medicare and Medicaid Services (CMS) to eliminate the retroactive benefits. CMS has already approved similar requests by Iowa, Kentucky, Indiana, and New Hampshire to waive retroactive coverage. A lawsuit is challenging Kentucky’s waiver, which also imposes work requirements for Medicaid recipients.
Advocates argue that if Medicaid applicants cannot get coverage before the month of application, they may be saddled with uncovered medical bills or fail to receive needed health care because they cannot afford it. According to Justice in Aging, which filed a brief in the Kentucky lawsuit, Medicaid applicants often do not file an application right away because of the complexity of the Medicaid application process or a false belief that Medicare would cover nursing home care.
For more information about the implications of the elimination of retroactive benefits, click here for a Kyser Family Foundation issue paper.
There is one final note of caution when electing to request the retroactive benefits on the Medicaid application. It is important to use care if gifts were made in the prior five years. An applicant may get outside the five year look-back, click the box requesting three months of retroactive benefits and find himself back inside the five year lookback triggering a penalty.
When a person applies for Medicaid to pay for long-term care, either in a nursing home or through the Home and Community Based Waiver (HCBW), Medicaid examines the applicant’s financial transactions for five years preceding the application to determine if any funds were given away or property sold for less than the value assigned by Medicaid. If so, a penalty is calculated by dividing the value of the amount transferred by $6100 (as of 2018) to determine the number of months of ineligibility.
In nursing home Medicaid cases it was always clear that the penalty started to run when the person resided in a nursing facility and would meet all requirements for Medicaid eligibility but for the existence of the penalty for transferring assets. In that situation a person is approved for Medicaid subject to the applicable penalty. He or she is billed privately during the penalty period, often at the peril of relatives who need to come up with funds to pay the bill. When the number of months of penalty assigned runs out, Medicaid will then pay for the resident’s care.
It has not been so clear about how to get the penalty running in HCBW cases. If the penalty cannot run until the person receives HCBW services, but the person cannot receive HCBW because of the transfer of assets, then you can never get past the penalty period. When the application is not taken upon identifying asset transfers, the penalty becomes permanent ineligibility for HCBW services.
On April 17, 2018, the Center for Medicare and Medicaid Services provided revised guidance on how to establish the start date for transfer penalties for HCBW applicants. In that directive CMS indicates that the penalty would begin to run at the point at which a state has: determined that the applicant meets the financial and non-financial requirements for Medicaid eligibility and the level-of-care criteria for the waiver; developed for the individual a person-centered service plan; and identified an available waiver slot for the individual’s placement. The penalty period for that applicant begins no later than the date on which a state has confirmed that all of these requirements are met, and transfers that would be subject to a penalty would be those that were made on or after the 60 months preceding this same date.
It would appear that persons who have transferred assets need to request that the application for HCBW still be taken, a care plan developed and proof provided that a waiver slot is available to establish the date all of these requirements have been met. Hopefully Medicaid will develop procedures to document eligibility for HCBW subject to the penalty so that services can begin when the penalty has run.
Jan Neal Law Firm, LLC 