Who Can Qualify for Nursing Home Coverage

Lacking access to alternatives like long-term care insurance or Medicare, most people pay out of their own pockets for long-term care until they become eligible for Medicaid. Since few people have long-term care insurance or can afford to pay the high cost of nursing home care out-of-pocket, most people eventually qualify for Medicaid. By default, it has become the primary source of funding for nursing home care and the long-term care insurance of the middle class.

Although their names are confusingly alike, Medicaid and Medicare are quite different programs. Medicare is an “entitlement” program, meaning that everyone who reaches age 65 and is entitled to receive Social Security benefits also receives Medicare. Medicaid, on the other hand, is a form of welfare – or at least that’s how it began. To be eligible for Medicaid, you must become “impoverished” under the program’s guidelines.

Also, unlike Medicare, which is totally federal, Medicaid is a joint federal-state program. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive federal money, which pays for about half the state’s Medicaid costs. (The state picks up the rest of the tab.)
This complicates matters, since the Medicaid eligibility rules are somewhat different from state to state, and they keep changing.

(The states also sometimes have their own names for the program, such as “Medi-Cal” in California and “MassHealth” in Massachusetts.) Both the federal government and most state governments seem to be continually tinkering with the eligibility requirements and restrictions. This most recently occurred with the passage of the Deficit Reduction Act of 2005 (the “DRA”), which was enacted on February 8, 2006, and significantly changed the rules governing the treatment of asset transfers and homes of nursing home residents.

The implementation of these differs from state to state. To be certain of your rights in your particular state, consult an elder law attorney. He or she can guide you through the complicated rules of the different programs and help you plan ahead. It is also worth noting that, spurred by incentives from the federal government, state programs are spreading that are aimed at keeping Medicaid long-term care recipients in the community and out of nursing homes for as long as possible. RLF