Medicaid provides health care coverage to more than 74.9 million Americans, making it the largest source of medical coverage in the U.S. While there are many programs under Medicaid, inpatient and outpatient hospital services are part of its standard coverage – and that can include long-term care facilities.
If you’re in the process of planning for long-term care, you may be wondering how to qualify for Medicaid.
Because states and the federal government jointly fund Medicaid, eligibility requirements can vary depending on your location.
In North Carolina, to qualify for Medicaid, you must meet one or more of the following requirements:
In addition, you must also meet the annual household income requirements, which are based on your household size. To qualify, your yearly before-tax income must be below the following levels:
It’s important to remember that Medicaid generally expects you to spend nearly all of your monthly income on the cost of long-term care. However, residents in nursing homes do receive a personal needs allowance of $30 per month.
If your income exceeds the state’s limits, you can still qualify for Medicaid if you take the right steps.
North Carolina is considered a “spend down” or medically needy state, which means that you can spend down excess income on your care and medical costs until you reach the state’s limit. At that point, Medicaid will cover the costs for the remainder of the spend-down period. In North Carolina, the spend-down period is six months.
Your income can also be reduced if you have a spouse and/or dependents. However, in some cases, allocating income to your spouse or dependents is enough to qualify for Medicaid.
If you’re married and your spouse intends to live independently while you’re receiving long-term care, you may be able to allocate some of your income to your spouse each month. This is known as Community Spouse Resource Allowance, or CRSA.
In North Carolina, the minimum CRSA is $26,076 and the maximum is $130,380. If you have dependents living in the community, they may also be able to keep some of your income.
In addition to your income, Medicaid also considers your financial resources or assets. In North Carolina, you cannot have more than $2,000 in assets (e.g., cash or property).
Some assets are exempt:
North Carolina has a five-year look-back period for Medicaid. What this means is that when you apply for Medicaid, they will check to make sure that your assets weren’t sold under the fair market price or given away within the last five years.
The federal gift tax rule is also not exempt from the look-back period. Any money that you give away as gifts within 5 years prior to your application would be in violation of the look-back rule.
If you violate the look-back rule, you will be hit with a penalty period. During the penalty period, you will not be eligible for Medicaid.
If you apply for Medicaid and are denied, you can appeal the decision.
Your appeal requirements may be unique, so it’s important to review the documentation you receive to understand when an appeal should be made. An appeal requires you to fill out the: Medicaid Services Recipient Hearing Request Form.
You’ll need to fill out and send this form to the Office of Administrative Hearing within 30 days of the denial.
Meeting North Carolina’s Medicaid eligibility requirements can be a challenge, but it’s not an impossible feat. If you’re in the early stages of long-term care planning, you may consider consulting with a Medicaid planning attorney.
Qualifying for Medicaid can be a complicated process, and having the help of an experienced attorney will ensure that you are as prepared as possible for long-term care costs.
There are strategies you can use to qualify for Medicaid without violating look-back rules. The sooner you start planning, the better.
Contact us today to see how Medicaid planning can help you qualify.